European Epichlorohydrin Market Resilient Despite Global Prices Decline
- 19-Jun-2023 3:22 PM
- Journalist: Timothy Greene
May 2023 witnessed a 1.2% positive growth in the European Epichlorohydrin market, driven by increased demand from the downstream Epoxy Resin industry. Despite a decrease in global market prices, including in the USA, the price of Epichlorohydrin in Europe remained unaffected.
The stable supply chain ensured consistent product availability throughout Europe, contributing to the market's positive performance. However, consumers still faced rising prices, with Europe's inflation dropping to 6.1% but remaining a cause for concern. The statistical agency of the European Union, Eurostat, reported a decline in the annual figure for European countries using the Euro, decreasing from 7% in April 2023.
While the decrease in price increment was seen as a step in the right direction, it is warned that customers might not experience relief from high prices for several months. Factors such as the ongoing conflict between Russia and Ukraine and other market conditions continue to impact European Epichlorohydrin prices.
Globally, the Epichlorohydrin market faced high product supply, leading to a price decline. In the USA, prices dropped by approximately 0.5%, while China and India experienced decreases of around 4% and 1%, respectively. Oversupply and weak demand from downstream industries played a significant role in this bearish market situation.
In the USA, the price of Epichlorohydrin was affected by the low purchasing activity in the country due to increased inflation, and the downstream construction sector situation was bearish during this month due to labor shortage across the country. Furthermore, feedstock Glycerine prices decreased by around 5%, supporting the declining price trend for Epichlorohydrin. Moreover, the uncertainty associated with the low water level in Panama Canal affected overseas demand and interrupted international trade, which further helped to declining prices in the country.
Asian Epichlorohydrin prices sharply declined due to oversupply and persistently low demand. Additionally, a substantial drop in the feedstock Glycerine contract price settlement for June further pushed prices downward. Producers in the region responded by operating their plants at reduced capacity levels to protect margins and avoid losses. However, these efforts failed to balance market fundamentals, as demand remained weak, and buyers only purchased necessary quantities without building up large inventories.
Looking ahead, ChemAnalyst predicts a potential price increase for Epichlorohydrin in the second half of June 2023. Anticipated growth in demand from the downstream Epoxy Resin industry, combined with the influence of feedstock prices, is expected to drive this market shift in the global Epichlorohydrin sector.