Price trend in 2023:

The market situation of epichlorohydrin will decline in 2023. According to the Commodity Market Analysis System of Business Society, the average price of epoxy chloropropane for enterprises was 9100.00 yuan/ton on January 1, 2023, and 8125.00 yuan/ton on December 31, with a 10.71% decline in the market for the year.

In the first half of the year, the spot supply in the Jiangsu and Shandong markets was tight in January, and companies had a price boosting mentality. The market remained sluggish and stable before and after the Spring Festival, with small fluctuations in company quotations. In February, there was significant cost support, but downstream demand was weak, with only small purchases for basic needs. Factory shipments were under pressure, and cumulative inventory increased. The supply and demand side dragged down the market. The cost support for March still exists, with some epichlorohydrin units shutting down or operating at reduced loads. However, the demand support is weak, with downstream mainly consuming inventory raw materials. Market sentiment is under pressure, and the focus of epichlorohydrin negotiations is weak. In early April, some devices were in a state of shutdown, and the market spot supply was tight. Downstream inquiries increased, supporting the rise of the epichlorohydrin market. In the middle and late stages, as some devices gradually restarted, the market supply increased, and the demand side dominated the market trend, causing the epichlorohydrin market to fluctuate upwards. In May, the utilization rate of production capacity on the supply side remained low, but there was limited follow-up on the demand side. Downstream consumers consumed more inventory raw materials and mainly restocked on low demand. The market trading atmosphere was light, and the market was operating weakly. In June, the demand side dominated the market, mainly due to weak downstream epoxy resin operation, consumption of contract volume and inventory. The enthusiasm for entering the market inquiries was not high, and small orders for basic needs followed up. Market transactions continued to be under pressure, and holders offered to sell at a discounted price. With demand dragging down, the focus of negotiations in the epoxy chloropropane market continued to decline.

In the second half of the year, under the influence of supply and demand in July, the market first fell and then rose. At the beginning of the month, downstream consumption contracts and inventory were mainly affected, and enterprise shipments were under pressure. High end negotiation prices declined. In the latter half of the year, the overall utilization rate of industry capacity was low, and the market supply was tight, supporting the rise of the market. The cost and supply side support in August are still acceptable, with downstream demand mainly following up and the market slightly rising. In September, the industry’s capacity utilization rate in the first half of the month was below 50%, and some companies had no inventory pressure. Downstream inquiries into the market increased, driving steady price increases for companies. In October, downstream consumption of inventory raw materials was the main trend, and small orders were followed up on buying dips. Holders were under pressure to ship, and some companies were offering discounts to ship. In November, spot supply was tight, but the weak demand led to a weak market trend. In December, some factories in Jiangsu, Zhejiang, Shandong and other regions shut down for maintenance, resulting in a tight supply of spot goods in the market. However, the main downstream epoxy resin transactions were limited, and the demand side support was weak. The market atmosphere was stagnant, and the market remained stable with little movement.

Market forecast for 2024:

Supply side: The production capacity of epichlorohydrin has maintained a growth trend in 2022 and 2023, with an additional production capacity of around 300000 tons in 2023. The production in 2023 has also slightly increased compared to 2022, and it is expected that the supply side of epichlorohydrin will continue to show an incremental expectation in 2024.

On the demand side:

The main downstream epoxy resins, according to the commodity market analysis system of Business Society, saw a decline in market prices in 2023. The starting price was 15833.33 yuan/ton, and the ending price was 13233.33 yuan/ton, with an annual decline of 16.42%. In 2023, the production capacity utilization rate of the epoxy resin industry was low, and support for the epoxy chloropropane market was weak. It is expected that the production capacity of epoxy resins will continue to grow in 2024, More attention still needs to be paid to the impact of the production of epoxy resin on the market of epichlorohydrin.

Cost side: Upstream propylene: In 2023, the Chinese propylene market fluctuated and declined. Taking Shandong propylene as an example, the average price at the beginning of the year was 7244.60 yuan/ton, and the average price at the end of the year was 6868.25 yuan/ton, with a 5.19% decline in the domestic market. Based on a comprehensive analysis of crude oil and supply and demand, it is expected that the center of gravity of propylene prices in 2024 may continue to decline compared to 2023, and the expected decline is relatively controllable.

Import and export: According to customs data, the total import volume of epichlorohydrin in China in 2023 was 1368058 kilograms, a year-on-year decrease of 25.73%. In 2023, the total export volume of epichlorohydrin in China was 57860383 kilograms, a year-on-year decrease of 19.66%.

Comprehensive prediction:

In summary, it is expected that the supply and demand of epichlorohydrin will double increase in 2024, and the demand side may still dominate the market. It is expected that the epichlorohydrin market will fluctuate narrowly in 2024, and more attention still needs to be paid to cost pressure.