Executive Summary: In the first quarter of 2026, the domestic epichlorohydrin (ECH) market price exhibited a pattern of rising initially before falling. Concurrently, export performance was weak, with a significant year-on-year decline of 76.24% in export volume for January-February. According to customs data, ECH exports in January were 0.08 thousand tons, a decrease of 69.88% month-on-month. Exports recovered to 0.2 thousand tons in February, representing a 153.61% month-on-month increase but a 71.52% year-on-year decrease.

Customs statistics show that China's ECH exports in January 2026 amounted to 783.53 metric tons, a decrease of 69.88% month-on-month, with an average export price of $1,660.82 per ton, up 2.53% month-on-month. India was the largest destination, receiving 519.12 tons at an average price of $1,601.63 per ton. In February 2026, exports reached 1,987.09 metric tons, a surge of 153.61% month-on-month, with an average price of $1,680.59 per ton, up 1.19% month-on-month. Exports to India again led at 1,625.66 tons, averaging $1,646.46 per ton.

Cumulative ECH exports for January-February 2026 totaled 2,800 tons (0.28 thousand tons), a sharp year-on-year decline of 76.24%, indicating a significant contraction in export scale. This downturn is attributed to multiple factors: firstly, the concentrated release of new overseas production capacity has increased self-sufficiency in key sales regions, reducing reliance on Chinese supply; secondly, weak global demand for epoxy resins and downstream end-products has dampened overseas purchasing interest; thirdly, persistently high domestic raw material costs have kept industry profitability below the cost line. This, coupled with maintenance shutdowns at some domestic plants leading to lower overall operating rates, has constrained export supply. Additionally, the export arbitrage window has periodically closed, diminishing companies' motivation to secure export orders. The combined effect of these factors has led to a pronounced contraction in industry exports.

Analyzing the trade flow structure for January-February 2026, China's ECH exports show a highly concentrated regional pattern, primarily directed to the Indian market. Driven by sustained demand growth in India's downstream epoxy resin industry, its import dependence on upstream ECH feedstock has further increased. On a monthly basis, China's ECH exports to India in February were 1,625.66 tons, accounting for 81.81% of that month's total exports, all conducted under general trade.

According to customs statistics, China's ECH exports in January-February 2026 exhibited significant regional concentration, primarily originating from Zhejiang, Shandong, Jiangsu, and Liaoning provinces. Their respective export volumes were approximately 2.1 thousand tons, 0.4 thousand tons, 0.1 thousand tons, and 0.1 thousand tons. The contribution from other provinces/cities was minimal and negligible to the overall export volume. In terms of regional export structure, Zhejiang Province, leveraging its well-developed port logistics system, mature trade support advantages, and scaled industrial base, has become the core region for China's ECH exports, dominating the national total export volume.

Q2 ECH Export Outlook:
Considering the current situation, several domestic plants, such as Fujian Huanyang and Jiangsu Haixing, are or will be shut down in Q2. However, new capacity from Inner Mongolia Pangu is expected to come online, balancing the domestic ECH supply-demand gap. Furthermore, prices in Q2 are likely to remain high with adjustments, supported by elevated costs, significantly compressing import arbitrage opportunities. This may directly dampen producers' export enthusiasm. Simultaneously, maintenance plans for some downstream units will further constrain procurement demand. In Q2, the market trading logic for ECH is expected to shift from indirect geopolitical drivers to fundamental supply-demand dynamics. Total Q2 export volume is anticipated to continue its sequential decline. Close attention should be paid to import arrival data for April and the following months.