The “high light” moment of epoxy resin in 2020-2021 has become history, and the market wind will decline sharply in 2022, and the price will fall again and again because of the serious homogeneous competition of basic liquid epoxy resin and obvious contradiction between supply and demand.

In the first half of 2022, under the background of the outbreak of geopolitical conflicts, overseas inflationary pressure to carry out continuous development of increasing enterprises and multi-point outbreak of epidemics, the downward pressure of domestic social and economic growth further through expansion. The price of the main raw material epoxy resin has been falling. And the main downstream industries such as coatings, wind power, electronics, construction, automotive and other weak demand, the continuous production of new devices further put pressure on the market.

From January to early February 2022, raw materials Bisphenol A and Epichlorohydrin brought some cost support and the price of epoxy resin rose slightly, followed by the rapid economic downward development in China market, which has the tendency to intensify. By the beginning of July, the price of liquid epoxy resin has dropped to below 20,000 RMB/ton, which is more than 20% lower than the beginning of the year.

The market environment was very cold and clear for a long time.

The analysis of the historical price of liquid epoxy resin in the past 10 years shows that from January 2012 to June 2022, the historical average price of liquid epoxy resin is 19,700 yuan per ton, and it is clear from the price chart that the price of about 20,000 yuan is the pressure line and support level of liquid epoxy resin.

From the cost side, during the past 10 years, liquid epoxy resin price was around RMB20,000/ton period, which mainly included raw materials to carry out cost (bisphenol A, epichlorohydrin and caustic soda) at an average ratio of about RMB16,000/ton, and the current raw material management cost of RMB16,468/ton is slightly higher than the average producer cost control level in China’s historical development. Considering the year by year increase of labor, management and utility costs, the total production cost of epoxy resin has increased significantly compared with previous years, increasing the pressure on producers.

Table. The main raw material cost of liquid epoxy resin 20,000 yuan/ton in each historical period

The above data is for reference only.

Although history is not always the same, there are always striking similarities. From a longer historical development cycle analysis, liquid epoxy resin most of the students period we are in the range of 15000-20000 yuan/ton economic operation, nearly two years downstream wind power and copper clad board and other areas of the great outbreak of society brought about by the super cycle management has become a thing of the past, the industry will gradually establish a return to rationality.

Considering the current market situation, two-way trading agreement market has initially shown signs of bottoming out. Epichlorohydrin in the bisphenol A market still has a small reduction in space, while the epoxy downstream air atmosphere is still strong, the epoxy market is expected to continue to decline in the short term. However, with the reduction of enterprise profit value students and even losses, major factories have stopped production to reduce the negative, the market development of low-priced sources will gradually achieve a reduction in epoxy resin as the market is not far from the stage of bottoming.

In the long run, bisphenol A, epichlorohydrin and epoxy resin new production capacity is huge, epoxy resin production capacity concentration release period for 2023-2024. the next few years, the industry chain overall shock downward trend still exists.

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