In 2023, the price of China’s epoxy resin market shows a range of fluctuations, and the market is mainly depressed after rising from January to September. The highest point of liquid epoxy resin in the year occurred in early February, the price of about 15,700 yuan/ton, and the highest point of solid epoxy resin occurred in mid-to-late September, the price of about 15,100 yuan/ton. The lowest point is in mid-to-late June, and the resin price is about 11900-12000 yuan/ton.

As of September 21, the gross profit of liquid epoxy resin in the third quarter was -111 yuan/ton, and the gross profit of solid epoxy resin was -37 yuan/ton, which continued to shrink compared with the first and second quarters. The price difference between the epoxy resin market price and the cost has gradually narrowed, and the market price has fluctuated around the cost line for a long time, and even formed an upside down with the cost, resulting in the resin industry profits being squeezed sharply, and the loss has become the norm.

Second, the industry capacity continues to expand, and the capacity utilization rate is low

In 2023, as of September, the domestic epoxy resin production capacity of 255,000 tons (Zhejiang Haobang 80,000 tons/year, Anhui stellar phase I 25,000 tons/year, Dongying Hebang 80,000 tons/year, Neiqiu Xixin 20,000 tons/year, Tongling Hengtai phase I 50,000 tons/year), the total domestic epoxy resin production base reached 3,267,500 tons/year. In September, the domestic production of epoxy resin was 1.232 million tons, an increase of 6.23%. The gradual increase in its output is not due to the improvement of the capacity utilization rate of the industry, mainly due to the increase of new players in the field, and the gradual stability of new devices.

Third, the end industry consumption is difficult to be optimistic

In the real estate industry, in the medium and long term, population growth has declined, urbanization has slowed down, housing investment attributes have weakened, real estate has gradually returned to residential attributes, and housing demand has decreased. House prices have not yet stabilized, and buyers are more wait-and-see under the concept of “buying up and not buying down.” According to relevant data analysis, from January to August, the national real estate development investment decline continued to expand, in August, the real estate development boom index declined for four consecutive months, from January to August, the national real estate development investment of 7.69 billion yuan, down 8.8%; From January to August, the sales area of commercial housing was 739.49 million square meters, down 7.1% year-on-year, of which the sales area of residential housing was down 5.5%. The sales volume of commercial housing was 7,815.8 billion yuan, down 3.2%, of which the sales volume of residential housing was down 1.5%.

In the wind power industry, according to the data monitoring of Longzhong Information, the newly installed capacity of domestic wind power from January to July 2023 was 26.31GW, +73.22% year-on-year; From January to July, the cumulative installed capacity of wind power was 392.91GW, +14.32% year-on-year. From January to July, the consumption of epoxy resin was 11,800 tons, +76.06% year-on-year. In the fourth quarter, it is expected that the wind power industry is difficult to have a significant positive, and it is expected that the newly installed capacity of domestic wind power will be about 45-50GW in 2023, and the consumption of epoxy resin will be about 200,000 tons.

Electronic and electrical point of view, the national grid, infrastructure projects in the national policy support is in a growth state, but the copper clad plate industry is not booming, Sheng benefit and other leading enterprises in September started about 8-90%, a recession of 10-20% than last year, second and third-line small factories started 5-60%, a recession of 30%-40% than last year, after the epidemic period, the economic recovery is less than expected.

In the fourth quarter, the cost side, A number of new units of bisphenol A plan to put into production, Gulf chemical, Hengli Petrochemical, Longjiang Chemical and other 900,000 tons/annual production capacity is about to enter, downstream terminal demand is difficult to improve expectations, demand continues to restrict market trends. However, in the third quarter, international crude oil rose to A high, the upper center of gravity rose, the fourth quarter or stage has support from the cost side, but in the context of demand and supply, the industry is cautious, it is expected that the fourth quarter bisphenol A may have a downward trend, but under the support of the bottom of the cost side, the decline rate or limited; Epichlorohydrin will continue to hover in the low range, the market supply will increase, the pre-parking device will return to normal, and new devices such as Jinbang in Hebei and Sanyue in Shandong will also be put into production one after another, and the market competition pressure will not be reduced. Supply side, from October to November, Anhui region still has two sets of new epoxy resin equipment put into operation, by the end of 2023, the domestic epoxy resin production capacity increased to 3.482,500 tons/year, capacity supply is more abundant. On the demand side, most of the downstream coatings, wind power, electronic and electrical industries are staged just to fill positions, and the overall demand is difficult to substantially change. In summary, the contradiction between supply and demand of domestic epoxy resin still exists, the market price in the fourth quarter or around the cost line fluctuates, the price range hovers around 13500-15500 yuan/ton, it is recommended that the industry be cautious.