Overview:
During this period, the domestic epichlorohydrin market experienced a rapid downward trend. The price decline was primarily driven by multiple bearish factors, including continuously weakening cost support, supply-side pressure, and persistently sluggish downstream demand. Among these, poor downstream demand was the core reason for the decline. As competitive pressure in the market intensified, industry players grew increasingly bearish on the outlook, further fueling the ongoing price drop. As of May 21, the market price in Jiangsu stood at 12,050 RMB/ton, down 800 RMB/ton from May 14, a decrease of 6.23%.

During this period, multiple bearish factors converged. Producers turned pessimistic, with expectations of further declines gradually heating up. Competitive pressure for shipments continued to rise, prompting enterprises to actively lower ex-factory quotations, and low-priced offers kept emerging in the market. On Tuesday, the Jiangsu market price fell to 12,350 RMB/ton (ex-works on acceptance), down sharply by 400 RMB/ton or 3.14% week-on-week. However, this significant price drop did not effectively stimulate downstream restocking demand. Due to a "buy on rising, not on falling" mentality, purchasing operations remained cautious, with few new orders entering the market. As producers faced mounting shipment pressure, the market was engulfed in an atmosphere of broad price declines. On Wednesday, the Shandong market price first breached the 12,000 RMB/ton (ex-works on acceptance) threshold, and low prices continued to hit new lows for the year, with the decline spreading further.

1. Poor Demand Performance, Insufficient Price Support

Over the past month, as geopolitical disruptions eased, upstream raw material prices fell, and the recovery of end-user demand fell short of expectations, overall market trading sentiment remained cautious. Epoxy resin market prices continued to weaken and decline. The previously high profit margins rapidly narrowed, gradually falling back to relatively reasonable levels, and the market gradually returned to supply-demand fundamentals. As of the close on May 21, the mainstream price of liquid epoxy resin in East China was 15,000–15,600 RMB/ton (net water, ex-works), down 4.94% from the previous period; the mainstream price of solid epoxy resin in Huangshan was 14,400–14,500 RMB/ton (cash, local), down 3.67% month-on-month. Affected by the overall weakness in the industrial chain, epoxy resin producers had low enthusiasm for production, mainly consuming contractual volumes and inventories, and lacked the capacity to accept high-priced raw materials. The sluggish downstream demand further weakened the price support for epichlorohydrin.

2. Continuous Decline in Main Raw Material Glycerin Prices, Further Weakening Cost Support for Epichlorohydrin

Since mid-April, domestic glycerin prices have been continuously declining. As of May 21, negotiations for domestic refined glycerin (95% content) delivered to East China were at 9,400–9,600 RMB/ton, with a mainstream reference price of 9,500 RMB/ton, and flexible negotiations for actual transactions. The delivered price for domestic refined glycerin (99.5% content) was 9,800–10,000 RMB/ton. Support from the cost side loosened. The overall operating rate of domestic glycerin plants and import arrivals remained stable, leading to limited fluctuations in overall supply. The downtrend in downstream epichlorohydrin was difficult to reverse, with low capacity utilization rates and low purchasing interest for glycerin, limited to small quantities on a demand basis. Lacking support from downstream demand, glycerin market participants felt pressured and became more willing to offer concessions to sell, continuously lowering their quotes.

3. Multiple Bearish Factors Present, Market Sentiment Remains Bearish

Currently, the bearish atmosphere in the market continues to spread. Cost-side support continues to weaken, end-user demand follow-up remains sluggish, and combined with the collective decline in upstream and downstream products across the industrial chain, market participants are growing increasingly pessimistic. Bearish sentiment is persistently fermenting. Competition for cargo circulation in the market intensifies, with manufacturers and traders showing a marked inclination to cut prices to offload inventory, further exacerbating the downward pressure on the market. The overall market is under significant strain.

4. Bearish News Still Lingers; Short-Term Epichlorohydrin Prices May Undergo Weak, Narrow Adjustments

The domestic epichlorohydrin market is highly likely to continue its weak trend. After the recent sustained correction, market prices have already fallen to relatively low levels, and the subsequent downside space is gradually narrowing.

On the cost side, glycerin market prices are expected to consolidate weakly in the next phase. On one hand, crude glycerin prices have narrowed slightly, weakening cost support. On the other hand, the operating rates of plants in major downstream industries (such as epichlorohydrin and polyether) remain low, demand continues to decrease, and purchasing willingness weakens. The actual transaction focus in the market is likely to continue its downward trend.

On the supply side, multiple plants in Shandong, Hebei, and other regions plan to reduce operating rates or shut down for maintenance. This will lead to a phased tightening of spot cargo supply, providing slight short-term support for the market. However, the transmission of this positive factor is weak and insufficient to change the overall weak market trend.

On the demand side, the downstream market exhibits strong wait-and-see sentiment, with overall actual transaction activity remaining light. Although there is an expectation of phased restocking in the future, the operating rate of the main downstream epoxy resin industry shows a declining trend. Enterprises in the industry are mainly focused on consuming their own inventories and fulfilling long-term contracts, resulting in a lack of strength in releasing new procurement demand.

Overall, with weak cost support, the recovery of end-user demand falling short of expectations, and market participants adopting a cautious operational mindset, it is expected that the domestic epichlorohydrin market will maintain a weak, narrowly fluctuating pattern in the short term.