North America
The North American Epichlorohydrin (ECH) market displayed a notable downtrend during the fourth quarter of 2023 when compared to the previous one. However, October remained majorly silent due to the maintenance shutdown of the Westlake Epoxy in Deer Park, Texas a major manufacturer of ECH with a capacity of 135,000 mt/year on 24 September 2023 as the supply-side capacity utilization rate reached only half of the total capacity, indicating underutilization.
Conversely, November witnessed a clear downtrend despite certain companies hesitating to scale back production, the imminent introduction of new production capacity limited support on the supply side. The sluggish performance of the downstream epoxy resin market, largely dependent on a depleting inventory of raw materials, contributed to a cautious approach in ECH inquiries driven by rigid demand considerations.
The US ECH market witnessed a significant price decrease of around 15% from the previous quarter of 2023, primarily affected by cheaper imports of products from overseas markets. The price also saw a decline of 41% from the same quarter of the previous year. The latest price of ECH CFR New Jersey in the USA in December was USD 1854/MT.
APAC
Epichlorohydrin prices in the APAC region during the fourth quarter of 2023 witnessed a complete rebound compared to the third quarter. This upward trend can be attributed to a notable increase in the cost of feedstock Glycerine, which experienced a rise in the Asian market during October.
Another major factor was the overall bullish market sentiment during November, as demand for Epichlorohydrin has risen due to the expected improvement in economic activities across the region. Concurrently, the domestic supply of the product struggled to keep pace with the heightened overseas demand, leading to insufficient inventories and creating a tight supply scenario.
In South Korea, which experienced the highest price changes in the region, Epichlorohydrin prices were influenced by a low supply. This scarcity of supply, coupled with the overall bullish market sentiment, contributed to an increase in prices. Additionally, the trend, seasonality, and correlation analysis for the country in the fourth quarter of 2023 showed a positive price percentage change. The latest price of Epichlorohydrin FOB Busan in South Korea for December was USD 1171/MT.
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Europe
The fourth quarter of 2023 proved to be challenging for the Epichlorohydrin (ECH) market in Europe. The market experienced a bearish trend, primarily due to weak demand from the construction industry, which was impacted by high-interest rates and rising building costs.
This led to a decline in both input costs and output charges. The supply of ECH remained moderate throughout the quarter, with available raw materials contributing to high supply chain pressures. However, the demand remained low due to low purchasing activities and delayed investments, reflecting an uncertain and cautious environment.
The Netherlands, being a key player in the European market, saw a decline in ECH prices. The country experienced a decrease in demand from the downstream construction industry and faced challenges such as cheaper imports and low demand from the epoxy resin industry as the Euro to the United States Dollar appreciated during December with a monthly increase of 1.50%. Henceforth, the imported material acquired by the Netherlands remained at a cheaper rate compared to the previous month. The latest price for Epichlorohydrin CFR Rotterdam in the Netherlands was USD 2644/MT in December.
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