Update on epoxy resin production and prices in 2022

     Epoxy resin materials are widely used in various industries, of which printed circuit boards in the electronics industry are one of the largest application industries, accounting for a quarter of the overall application market.

     Because epoxy resin has good insulation and adhesion, low curing shrinkage, high mechanical strength, excellent chemical resistance and dielectric properties, it is widely used in the production of copper clad laminates and semi-cured sheets of substrates upstream of circuit boards.

     Epoxy resin is too closely related to the circuit board substrate, so once its output is insufficient, or the price is high, it will restrict the development of the circuit board industry, and will also lead to a decline in the profitability of circuit board manufacturers.

Production and Sales of epoxy resin

      With the development of downstream 5G, new energy vehicles, artificial intelligence, Internet of Things, data centers, cloud computing and other emerging application fields, the circuit board industry has recovered rapidly under the weakening impact of the epidemic, and the demand for HDI boards, flexible boards, and ABF carrier boards has soared; coupled with the increase in demand for wind power applications month by month, China’s current epoxy resin production may not be able to meet the growing demand, and it is necessary to increase the import of epoxy resin to alleviate the tight supply.

     In terms of epoxy resin production capacity in China, the total production capacity from 2017 to 2020 is 1.21 million tons, 1.304 million tons, 1.1997 million tons and 1.2859 million tons, respectively. The full year 2021 capacity data has not yet been disclosed, but the production capacity from January to August 2021 reached 978,000 tons, a substantial increase of 21.3% over the same period in 2020.

     It is reported that at present, the domestic epoxy resin projects under construction and planning exceed 2.5 million tons, and if all these projects are successfully put into operation, by 2025, the domestic epoxy resin production capacity will reach more than 4.5 million tons. From the year-on-year increase in production capacity from January to August 2021, it can be seen that the capacity of these projects has been accelerated in 2021. Production capacity is the bottom of industrial development, in the past few years, China’s total epoxy resin production capacity is too stable, can not meet the growing domestic market demand, so that our enterprises in the past for a long time have been dependent on imports.

     From 2017 to 2020, China’s epoxy resin imports were 276,200 tons, 269,500 tons, 288,800 tons and 404,800 tons, respectively. Imports increased significantly in 2020, up to 40.2% year-on-year. Behind these data, it is closely related to the lack of domestic epoxy resin production capacity at that time.

     With the significant increase in the total production capacity of domestic epoxy resin in 2021, the import volume decreased by 88,800 tons, a year-on-year decrease of 21.94%, and China’s epoxy resin export volume also exceeded 100,000 tons for the first time, an increase of 117.67% year-on-year.

     In addition to the world’s largest supplier of epoxy resin, China is also the world’s largest consumer of epoxy resin, with consumption of 1.443 million tons, 1.506 million tons, 1.599 million tons and 1.691 million tons in 2017-2020, respectively. In 2019, consumption has accounted for 51.0% of the world, making it a veritable consumer of epoxy resin. The demand is too great, which is why in the past we needed to rely heavily on imports.

The Price of epoxy resins

     The latest price, on March 15, the epoxy resin prices given by Huangshan, Shandong and East China were 23,500-23,800 yuan / ton, 23,300-23,600 yuan / ton, and 2.65-27,300 yuan / ton, respectively.

     After the resumption of work in the Spring Festival of 2022, the sales of epoxy resin products rebounded, coupled with the repeated rise in international crude oil prices, driven by multiple positive factors, the price of epoxy resin rose all the way after the beginning of 2022, and after March, the price began to fall, weak and weak.

     The price decline in March may be related to the fact that many parts of the country began to fall into the epidemic in March, ports and high-speed closures, logistics were seriously blocked, epoxy resin manufacturers could not ship smoothly, and downstream multi-party demand areas entered the off-season.

      In the past 2021, the price of epoxy resin has experienced several increases, including April and September ushered in skyrocketing prices. Remember that at the beginning of January 2021, the price of liquid epoxy resin was only 21,500 yuan / ton, and by April 19, it rose to 41,500 yuan / ton, a year-on-year increase of 147%. At the end of September, the price of epoxy resin rose again, causing the price of epichlorohydrin to soar to a high price of more than 21,000 yuan / ton.

      In 2022, whether the price of epoxy resin can usher in a sky-high price increase as last year, we will wait and see. From the demand side, whether it is the demand for printed circuit boards in the electronics industry or the demand for the coating industry, this year’s demand for epoxy resins will not be too bad, and the demand for the two major industries is growing every day. On the supply side, epoxy resin production capacity in 2022 is obviously far more improved. Prices are expected to fluctuate due to changes in the gap between supply and demand, or repeated outbreaks in many parts of the country.