Epoxy resin enters a brief 'frozen period' on a roller coaster ride

After experiencing a continuous rise from July to early August, epoxy resin seems to have once again encountered a cold spell and entered a brief "frozen period". Low raw material prices and sluggish demand are difficult to provide favorable support for high-end prices, resulting in poor overall performance in the domestic market. In addition, the expansion of epoxy resin production capacity in Asia may lead to a flood of supply in the European market, causing a global decline in epoxy resin industry prices. The construction and automotive industries are the two most important downstream industries for epoxy resin, and the actual usage of epoxy still needs to focus on the changing trends on the demand side.

In terms of raw materials, since August, the upstream raw material epichlorohydrin has shown a continuous decline. After the main manufacturers rose to 13000 yuan/ton in July, the market response was lukewarm. At the beginning of the month, it quickly fell, with a real drop of more than 1000 yuan to 10300-10500 yuan/ton and a virtual drop of more than 2000 yuan to 10900-11000 yuan/ton. Bisphenol A rose slightly in the early stage of the month, but fell back in the middle and late stages, falling below the beginning of the month price to 12700 yuan/ton at one point. Due to the influence of dual raw materials, the price of epoxy resin has experienced narrow fluctuations and started to fall from mid month onwards. Domestic demand is weak and difficult to adjust. Solid and liquid epoxy resins are in a quagmire, and the situation of promoting price growth is severe. The buying atmosphere is not good, and the overall market is weak.

On the downstream side, the solid and liquid production of epoxy resin is currently saturated, and most manufacturers are mainly engaged in normal production, with an overall operating rate of about 50-60%. Downstream demand remains low for a long time, and the supply and demand side continues to be bearish. The market transaction volume is limited, and the phenomenon of resin manufacturers bidding is difficult to avoid, especially in the field of solid resin. Some small factories continue to sell low-priced goods, and in some areas, a small amount of low-quality products are even sold at around 15500 yuan/ton. Mainstream negotiations still hover between 15900-16500 yuan/ton.

Liquid resin manufacturers often choose to quote high and quote low, resulting in a difference of nearly a thousand yuan between the actual transaction price and the quoted price, and the reference value of the virtual offer is not significant. A few manufacturers have temporarily stopped to observe, and their quotations are closer to the actual prices, but they are also facing difficulties in shipping and slow inventory digestion. Due to downstream users being close to the terminal and having low and scattered usage, they usually buy when prices rise and not when prices fall, and promotional policies are not conducive to normal sales.

Looking at the overall performance of epoxy resin in recent times, it has been like a roller coaster ride in July and August. At one point, epoxy resin was out of stock and rose, but quickly fell back to a low level to implement a rebound. However, due to the impact of the international crude oil price increase, the industrial chain is mainly on the rise. Although upstream raw materials have experienced a decline during the month, they are currently close to the bottom and there are no obvious signs of further decline. In addition, with the upcoming "Golden September and Silver October", the dual positive factors are expected to boost the resin market. In the short term, epoxy resin will still maintain a low-level oscillation pattern, but in the long run, it may emerge from the low-level market.