Supply-Demand Dynamics: ECH Expected to Trade in a Weak, Range-Bound Pattern Post-Holiday

Introduction: In September, the epoxy chlorohydrane (ECH) market transitioned from an upward trend to a stable consolidation pattern. Although there was no significant pressure on spot supply, downstream enterprises completed their pre-National Day holiday stockpiling early, and this restocking momentum lacked sustainability. As procurement pace slowed on the demand side, producers' shipment performance remained average, with offers mostly fluctuating within a range. Meanwhile, considering that the National Day holiday reduces trading days in October, sentiment for buying at low prices may rise, potentially exerting downward pressure on spot prices. Post-holiday changes in supply and demand will remain the dominant variables driving the market, and a narrow-range oscillation pattern cannot be overlooked.

1. Pre-Holiday Market Review

Table 1: Domestic ECH and Related Product Price List

Ahead of the National Day holiday, the domestic ECH market operated in a volatile consolidation mode. The trend for the main raw material, glycerin, was weak. Coupled with persistently soft downstream demand, support from both costs and demand weakened simultaneously, shifting market sentiment toward caution. Pressure to sell high-priced inventory increased, and manufacturers became increasingly pessimistic about the outlook, showing a stronger willingness to offer discounts to move goods, leading to a pullback from price highs. On September 21, the delivered price in the Jiangsu market dropped below 11,000 CNY/ton, stimulating some downstream enterprises to begin pre-holiday stockpiling. However, producers showed a clear intention to actively reduce inventories before the holiday, intensifying competitive pressure and leaving the market in a dilemma between rising and falling prices. Actual transactions were mostly negotiated within a specific range. Near the end of the month, some producers had oversold their available supply and intended to push new orders higher, but actual transaction volume was limited, suppressing market rallies and keeping prices in a range-bound fluctuation. As of September 30, the delivered price in the Jiangsu market was 11,100–11,200 CNY/ton, down 100 CNY/ton or 0.89% compared to September 1. In the downstream market, epoxy resin prices were clearly driven by cost factors, but shortfalls in demand constrained price rebounds. Prices mainly declined, and profit margins continued to compress. By late September, liquid and solid epoxy resin prices fell to 15,100 CNY/ton and 14,500 CNY/ton, respectively.

2. Data Analysis

Table 2: Domestic ECH and Related Product Data List

In September, the domestic ECH market was influenced by intertwined cost, supply, and demand factors, presenting an overall trend of rising first and then falling. At the beginning of the month, the Shandong Minji unit underwent a temporary shutdown, ending the downtrend seen in late August. This disrupted contract deliveries for some traders, improving inquiry activity. Shandong suppliers had strong intentions to hold prices, and other markets followed suit with upward movements. On September 9, the delivered price in Jiangsu rose to 11,500–11,600 CNY/ton, an increase of 2.67% from the start of the month. In mid-month, expectations for downstream "Double Holiday" stockpiling were positive, but the wide-range rally in Bisphenol A (BPA) suppressed epoxy resin procurement. Enterprises focused on consuming contracts and existing inventories, causing spot shipments to slow and prices to enter a narrow consolidation phase. In late September, the main raw material glycerin weakened, downstream demand remained soft, and high-priced inventory faced selling pressure. Manufacturers offered discounts to move goods, leading to a pullback from price highs. On September 20, the delivered price in Jiangsu fell to 11,100–11,200 CNY/ton, and on the 21st, it broke below 11,000 CNY/ton, stimulating pre-holiday stockpiling by downstream players. However, enterprises actively reduced inventories, leaving the market in a dilemma and resulting in range-bound negotiations for actual deals. By month-end, some enterprises had oversold supply and wanted to push new orders higher, but limited transactions kept the market in a range-bound fluctuation. Looking at the key downstream product, epoxy resin, September's market changes were primarily driven by raw material costs. BPA maintained high levels throughout the month, providing intermittent support to resin prices, but demand shortfalls constrained any rebound. During cost pullbacks, epoxy resins lost support and declined rapidly, with profit margins continuously compressed.

3. Post-Holiday Forecast

Table 3: Monthly ECH Supply-Demand Balance Sheet (10,000 tons)

Data Source: Chempricehub

In October, the domestic ECH market is expected to operate in a generally volatile and weakening trend, with a low probability of wide-range price fluctuations. On the cost side, domestic glycerin prices are expected to decline slightly within a narrow range, though the room for further drops is limited. Cost support for glycerin-route ECH remains robust, providing some positive sentiment to the market. On the supply side, units restarted in late September will maintain stable operations. Some shutdown units in Shandong plan to restart in October, while some units in Jiangsu anticipate shutdowns. After offsetting these start-ups and shut-downs, total market supply is expected to increase. Overall supply will be ample, and competitive pressure will persist. On the demand side, after some epoxy resin units restarted at the end of September, they are gradually entering stable operation. Epoxy resin supply is expected to grow in October and may pass through to the upstream raw materials. However, incremental terminal orders are limited; resin factories are primarily focused on digesting finished goods inventories, resulting in limited inquiries for new orders, which imposes certain bearish pressure on the ECH market. Regarding exports, current domestic ECH lacks obvious competitive advantages, so export volumes are not expected to change significantly.

As of September 30, 2026, an October sentiment survey conducted among domestic ECH market participants showed that 15% expect stability, 40% expect prices to rise, and 45% expect prices to fall. Bearish respondents cited that while cost support for ECH remains next month and production output is expected to increase, downstream consumption is also projected to rise. However, lacking new orders, downstream players will focus on consuming finished goods inventories, intensifying market competition and potentially pressuring the raw material market. Therefore, the downward cycle for the ECH market in October may outweigh the upward cycle, with a high probability of overall volatile and weakening trends.

Overall, upon returning from the holiday, the market lacks obvious bullish or bearish drivers in the short term, and supply-demand fundamentals are unlikely to shift rapidly. The market is expected to run in a trend of general stability with minor adjustments, with limited overall volatility. For the entire month of October, under the interplay of mixed factors, the ECH market is expected to maintain a volatile and weakening pattern, with a low probability of wide-range price fluctuations. Future attention should be paid to unit start-up/shutdown dynamics and downstream replenishment rhythms, which will continue to introduce uncertainty into the market.