Introduction: In 2026, China's epichlorohydrin industry continues to see growth in both capacity and output. As of now, total industry capacity has expanded to approximately 2.7 million tons. With new capacity gradually coming on stream, the industry's capacity base keeps increasing, further releasing effective supply. By May, China's epichlorohydrin production in May is expected to exceed 120,000 tons, with an average capacity utilization rate of 50%, down 7.85 percentage points from the same period last year, indicating a declining trend in average operating rates.

From January to May 2026, China's average monthly epichlorohydrin production was close to 120,000 tons, achieving steady year-on-year growth in industry output.

From January to May 2026, China's epichlorohydrin industry showed a steady growth trend in output, with an average monthly production expected to be close to 120,000 tons, achieving steady growth compared to the same period last year. Output continues to rise, and the supply-demand pattern is gradually optimizing amid structural adjustments.

Looking at monthly production, January output was about 122,000 tons, up 2.8% month-on-month, laying the foundation for a production recovery throughout the year. From February to April, as mainstream units in Shandong and Jiangsu restarted and ramped up operations, output fluctuated between 115,000 and 125,000 tons. May is expected to maintain a stable trend, with the monthly average steadying around 120,000 tons. The output growth is driven by two main factors: first, steady demand from downstream epoxy resin, which increases purchasing of epichlorohydrin; second, leading enterprises leveraging process and cost advantages to increase market share.

From January to May 2026, epichlorohydrin output from different processes all showed growth trends.

From January to May 2026, domestic propylene method and glycerin method output increased by 5.19% and 13.34% year-on-year respectively, with glycerin method output growing faster than the propylene method. Although the propylene method benefits from cost advantages and considerable profit margins, its development space is limited, and capacity expansion flexibility is insufficient. It mainly relies on increasing capacity utilization to release benefits and demonstrate its value. In contrast, the glycerin method, with continuous deployment of new capacity, maintains stable overall supply and sustains a thin-profit pattern. Production units maintain stable operating rates, thereby driving an increase in industry output volume.

In the second half of 2026, China's epichlorohydrin industry will continue its trajectory of steady supply growth and intensified process differentiation.

From June to December 2026, domestic epichlorohydrin supply will expand steadily. Coupled with stable operating willingness among enterprises, total output is expected to continue its year-on-year growth trend. Looking at monthly data, from June to August, production will fluctuate slightly due to the off-season demand, with output expected to remain between 115,000 and 120,000 tons. From September to December, driven by pre-stocking for the "golden September and silver October" season and year-end catch-up demand, output will recover to above 120,000 tons, pushing full-year output to exceed 1.4 million tons. The growth rates of propylene method and glycerin method output will continue to diverge.

Glycerin method: In the second half of the year, some newly added glycerin method capacity will enter stable operation. The industry will maintain a thin-profit to loss situation, and capacity utilization is likely to remain at low levels. However, the glycerin method will still be the core driver of output growth.

Propylene method: Although this production process has advantages such as low raw material costs and high profit margins, it is constrained by process bottlenecks and environmental regulations, resulting in limited expansion flexibility. Output growth mainly depends on increasing the operating rates of existing units. In the second half of the year, attention should be paid to the implementation of Shandong Haili's propylene method epichlorohydrin unit.