Global Epichlorohydrin Prices could come under pressure in the month of April

Epichlorohydrin (ECH) prices globally have been on the rise in March due to cost pressure from the upstream Propylene prices. While the month of February saw prices of Epichlorohydrin rebounding during the last week in the Asia Pacific (APAC) region, the European and the US markets have seen prices increasing consistently throughout Q1 of FY 22. Refineries in Europe and Asia have been struggling to break even vis-à-vis propylene refining margins forcing them to pass on higher costs to the downstream Epichlorohydrin producers.

The downstream epoxy resin market had seen a revival in demand in the month of March after being sluggish for the first two months of Q1 of FY22. Chinese ECH market saw a drop in spot prices in the last week of March before recovering on the 30^th of March due to a temporary slump in demand caused by a surge in covid 19 cases in the country prompting the government to re-enforce lockdowns. The Indian market, however, remained buoyant in the month of March with prices quoted in the range of INR 255/KG to INR 271/KG on an Ex-Location (Ahmedabad) basis. Imports from Thailand have also been priced higher with benchmark CFR JNPT prices assessed in the range of INR 201/KG to INR 215/KG.

Epichlorohydrin prices in the US and Europe have been rising since the beginning of the new year owing to a hike in the refining costs during peak winter and a consistent uptrend in the prices of upstream propylene. Prices for Germany assessed on an FOB Hamburg basis stood at USD 3495/MT and the benchmark CFR New Jersey prices in the US have been assessed at USD 3220/MT for March. The global Epichlorohydrin market could likely sustain the buoyancy through the month of April with the upstream value chain expected to see a further cost-push from a sharp surge in the crude oil prices during the first half of April period.