Introduction: In recent years, with the rapid expansion of domestic epichlorohydrin production capacity, the self-sufficiency rate has continuously increased, and import volumes have remained at low levels. However, from January to May 2026, import volumes saw significant year-on-year growth, primarily driven by multiple factors such as domestic supply contraction, gaps in high-end domestic supply, import arbitrage opportunities, strengthening downstream demand, shrinking export volumes forcing imports, and ample overseas supply. This led to a sharp surge in import volumes during the first five months of the year, hitting a new high since 2024.

I. Multiple Factors Jointly Drive a 867% Year-on-Year Surge in Imports from January to May 2026

According to customs data statistics, China's total epichlorohydrin imports from January to May 2026 were approximately 2,900 tons, a substantial increase of 867% compared to the same period last year, with the import dependence ratio also rising. Structurally, Thailand and South Korea constituted the absolute import sources, with import volumes of 2,800 tons and 200 tons respectively, accounting for 94.37% and 5.62% of the total imports, together nearly 100%.

Comparison of China's Epichlorohydrin Import Volume (10,000 tons) from January to May 2026

| Item | Jan-May 2026 | Jan-May 2025 | Change | YoY Change |
| --- | --- | --- | --- | --- |
| Import Volume | 0.29 | 0.03 | 0.26 | 867% ↑ |

The sharp year-on-year increase in domestic epichlorohydrin imports during the first five months of 2026 was jointly driven by factors such as domestic supply contraction, price arbitrage between domestic and international markets, downstream demand expansion, and structural quality gaps in high-end raw materials.

On the supply side, multiple domestic plants underwent concentrated maintenance, keeping industry capacity utilization at low levels for an extended period. Meanwhile, glycerin-based plants faced dual pressures from high raw material prices and weak end-user demand, resulting in sustained losses, prompting companies to proactively reduce operating rates or even shut down for maintenance. Although new capacity came online in the first half of the year, effective capacity release fell short of expectations, dragging down the overall industry operating rate. In terms of pricing, domestic raw material cost support was evident, with spot prices remaining high overall and experiencing periodic surges, creating a sustainable import arbitrage window with East Asian sources like South Korea and Thailand. Additionally, overseas production regions benefit from integrated chlor-alkali and glycerin raw material operations, offering significant cost advantages. Coupled with smooth maritime logistics between China, South Korea, and Thailand, and short shipping cycles, traders and downstream epoxy resin companies proactively increased overseas procurement. On the demand side, the wind power, new energy, semiconductor, and copper-clad laminate industries experienced upward momentum, driving a steady increase in overall epoxy resin consumption. At the same time, domestic purification processes for high-end electronic-grade epichlorohydrin are insufficient, with specifications failing to meet certification requirements for advanced new materials, creating rigid import demand. Combined with a sharp contraction in domestic epichlorohydrin exports during the same period, the diversion of originally export-oriented supply back to the domestic market further intensified spot market competition, ultimately pushing annual import volumes significantly higher.

II. Four Core Factors Jointly Suppress a 64% Year-on-Year Decline in Exports from January to May 2026

China's epichlorohydrin export volume from January to May 2026 showed a clear contraction trend, primarily suppressed by four core factors: tightening domestic supply, inverted domestic-international price spreads, overseas local production capacity substitution, and global end-user demand weakness.

From the perspective of export data, China's epichlorohydrin export volumes showed a weakening trend during 2025-2026. From January to May 2026, epichlorohydrin exports fell sharply by 64% year-on-year. Multiple factors jointly suppressed overseas sales. First, concentrated domestic plant maintenance and reduced operating rates at loss-making glycerin-based plants led producers to prioritize the domestic market, significantly reducing exportable supply. Second, high domestic spot prices created an inverted price spread compared to countries like South Korea and Thailand, leaving no export arbitrage opportunity. Third, the release of new local production capacity in Southeast Asia, South Korea, and other regions increased regional self-sufficiency, shrinking import demand from China. Fourth, global downstream epoxy resin end-user demand was weak, dampening overseas stocking enthusiasm. These multiple factors collectively led to a significant drop in export volumes. From January to May 2026, China's cumulative epichlorohydrin exports fell sharply by 64% year-on-year, with monthly volumes from February to April all below the levels of the same period. The average monthly export price from January to May was approximately $1,841/ton, up 50% from the same period last year.

III. In the Second Half of 2026, China's Epichlorohydrin is Likely to Continue the Trend of Increasing Imports and Decreasing Exports

Numerous bearish factors are suppressing exports: (1) Overseas local capacity expansion, shrinking regional foreign procurement demand. New epichlorohydrin units in countries like Thailand and Indonesia have been commissioned and put into operation, steadily increasing regional self-sufficiency. Additionally, stable operation of low-cost, integrated plants in Europe and America further reduces dependence on China. (2) Trade barrier constraints: India's five-year anti-dumping duty on China directly raises domestic export costs and completely blocks the circulation of Chinese supply in this key South Asian market. Additionally, China prioritizes internal consumption. (3) Increasing domestic demand, weakening export appetite. In 2026, the main downstream epoxy resin sector in China benefits from strong demand in end-use industries such as wind power composite materials, driving steady growth in epichlorohydrin consumption and enhancing internal absorption capacity. (4) Imbalance in domestic-international price spreads, no short-term export arbitrage opportunities. From 2025 to 2026, domestic epichlorohydrin spot prices have remained high, frequently exceeding 10,000 yuan/ton. The price competitiveness of domestic supply for export continues to weaken, with periodic inverted domestic-international price spreads leaving traders without reasonable arbitrage opportunities, further dragging down China's epichlorohydrin exports.

Domestic purification processes for high-end electronic-grade epichlorohydrin are insufficient, with specifications failing to meet certification requirements for advanced new materials, creating rigid import demand. Although the demand volume is limited, imports in the second half of the year are expected to exceed levels from the same period.

In conclusion, during the second half of 2026, rigid demand for domestic epichlorohydrin imports will support a steady increase in total volume. On the export side, various bearish factors will ferment, maintaining a slow downward trend.