For the Quarter Ending September 2021
North America
The prices of Epichlorohydrin (ECH) soared in the North American region on the back of the consistent demand from the downstream manufacturers in Q3 of 2021. Hurricane Ida struck USA Gulf Coast in late August which took down nearly 40% of the US’ caustic-chlorine capacity affected the downstream chlor-alkali chain, further driving the ECH prices higher during the quarter. Additionally, rising crude oil prices further impacted the Epichlorohydrin pricing in the region.
Asia
The overall market outlook of Epichlorohydrin showed progress as ECH prices registered a marginal increment in the Asia Pacific during third quarter of 2021. As Epichlorohydrin is largely imported from China and Thailand, its values in India witnessed a significant surge in line with the rise in import prices in Q3 2021. A trader revealed that although the offtakes of the product have remained stable in the regional market, the international price pressure has shown a significant impact upon the pricing fundamentals of the product. Besides, increment in demand for the downstream epoxy resins amidst the ease in lockdown restrictions has also provided an edge to its market fundamentals during the quarter. Towards the end of Q3, the Chinese ECH domestic and the spot market transactions were somewhat weak. Offered quotations Epichlorohydrin in China dropped, and FOB Ningbo discussions were assessed at USD 2400 per tonne, in the last week of September.
Europe
During the third quarter of 2021, the prices of ECH observed a significant rise in the European region followed by the firm demand from the downstream paint and coatings industry. Demand for epoxy resin grew considerably during the quarter which has led to an increment in the pricing of ECH across Europe. In addition, high freight cost also strengthened the overall pricing across the region, suppliers struggled to secure the material as imports weakened due to soaring shipping charges and limited availability of containers.
For the Quarter Ending June 2021
North America
Epichlorohydrin (ECH) prices kept on increasing throughout the quarter, backed by firm demand from the downstream sectors and tight raw material supplies. Demand for Epichlorohydrin remained firm from the downstream Epoxy resin market, while the supply remained tight due to low inventory levels as an effect of curtailed production during the last quarter. In addition, global shipping activities was also running on delays, due to clogged trade routes which also lead to steep rise in export offers for June. Moreover, firming crude oil values also impacted the prices of Epichlorohydrin (ECH) in the country.
Asia
Epichlorohydrin market demonstrated firm sentiments in Q2 in APAC region, backed by firm demand from the downstream sectors. Trade activities for Epichlorohydrin in Asia remained high during this quarter, as the demand from downstream Epoxy resin manufacturers was high in China while modest in India. Meanwhile, due to modest demand from the end user segment of Epoxy resin, manufacturers in India procured a fair number of cargoes from Thailand followed by China, Saudi Arab and Taiwan during the month of June. Procurement by the Indian traders were muted in May and suddenly increased in the month of June, the total ECH volumes procured during the month of June was estimated around 5900 MT in India.
Europe
The European market witnessed a steady rise in the price of Epichlorohydrin during this quarter, backed by global material shortage amid improved demand in tandem with economic rebound. The Epoxy resin market was heard improving month over month during Q2 2021 compared to Q1 2021. Therefore, the demand for Epichlorohydrin increased from this segment and led to a steep rise in its prices across Europe. In addition, soaring freight cost also strengthened the overall price scenario across the region and tightened the import supplies.
For the Quarter Ending March 2021
North America
During Q1 2021, acute shortage of ECH could be observed in North America and the prices showed an abrupt spike. After devastating winter storm across the USA gulf coast, all the plants located in the proximity of storm had to shut down during mid-February, which reduced the total output of Epichlorohydrin by more than 50%. Availability of feedstock Propylene which is highly concentrated around the gulf of USA reduced after this rare climate calamity. Due to notable supply crunch, prices of ECH rose sharply from USD 2095/MT levels observed in January to USD 2395/MT in March.
Asia
The Asian market witnessed stable demand for ECH from the downstream sectors amidst fall in supply of the feedstock Propylene, which was critically short in the global market and high in demand. Prices of ECH in the Indian and Chinese market observed significant rises every week and reached USD 2165/MT in China during February and USD 1894.3/MT in India during March 2021. In addition, sentiments in the Indian markets were bolstered after DCM Shriram announced an investment of around USD 137 million to expand its business, in which construction of a new plant of ECH with annual capacity of 51,000 Tonnes was also included.
Europe
Due to huge spike in prices of feedstock chemicals, price of ECH rose effectively Q-o-Q. Unfavourable weather conditions across some countries disrupted the supply chain activity causing the manufacturers to announce force majeures on their plants due to low availability of the feedstock chemicals like Propylene. One major producer from Germany mentioned that, due to high container prices, exports of ECH from Germany to Asia was getting too expensive.
For the Quarter Ending September 2020
Asia
ECH supply remained restricted with offers registering marked gains across Asia triggered by scheduled turnarounds and unplanned outages which kept the spot availabilities low between July-August. A Chinese ECH plant curtailed operating rates in August due to issues pertaining to upstream units. Moreover, ECH supplies from the 130 KTPA Jiangsu Haixing plant were taken offline in the early August due to technical issues. Demand was healthy in China, buoyed by ramped run rates at the downstream plants as several epoxy makers rushed to procure volumes before the extended National Day holidays begin in October. CFR China prices for ECH were heard around USD 1200-1250 per MT in August, amid anticipations that supply may further tighten in Q4. Offtakes by some Northeast Asian countries were capped due to lackluster downstream buying.
North America
ECH supply-demand gap stood balanced in Q3 because of the resumption in operations at the manufacturing unit of a leading producer who remained shut during Q2. Sentiments were hard hit after the sole ECH producer announced to shut down a Novalac plant in North America, which wasn't much productive. Meanwhile, demand started losing grounds post a much-needed recovery observed across the automotive and construction sectors. Firming Propylene lent support to the pricing curve which started regaining the uptrend. Amid suppressed dynamics, players maintained a cautious stance to monitor the global economic developments, especially in China, to see if it translates into more positive sentiments and redirect the trade flows.
Europe
The European ECH market turned quite balanced moving into Q3 as the supply-demand scenario was seen pushing back towards demand because only limited supply additions were foreseen on the horizon. Demand for Epoxy Resins was seen gradually recovering from the Q2 coronavirus impact causing players to report lifted margins. Players were able to materialize price increases as inventories in the European markets were replenished with higher cost stock. The downstream inquiries and purchases were seen showing greater activity over Q2 amid fears that some uncertainty is likely to persist even in Q4.
