Epichlorohydrin (ECH) is an organic compound that is widely used in the production of epoxy resins and glycerol. It can be produced either through propylene or glycerin. ECH exhibits properties such as adhesion, flexibility, chemical and heat resistance which make it suitable for manufacturing variety of resins including water-based epoxy resins, thermosetting resins, and composites. Rising demand from end-use industries such as paints & coatings, electrical & electronics, construction, and automotive has fuelled the growth of ECH market over the years.

The Global Epichlorohydrin (ECH) Market is estimated to be valued at US$ 2.95 billion in 2024 and is expected to exhibit a CAGR of 5.1% over the forecast period 2024-2031.

Key Takeaways

Key players operating in the ECH market are Momentive Performance Materials Inc., Solvay S.A., Hexion Inc., DOW Chemical Company, Mitsubishi Chemical Corporation, Aditya Birla Chemicals, Hubei Greenhome Chemical Co., Ltd., NAMA Chemicals, Jiangshan Chemical Co., Ltd., Olin Corporation, Zhejiang Jianye Chemical Co., Ltd., Arkema S.A., Hanwha Solutions Corporation, BASF SE, and Koppers Inc.

Epichlorohydrin (ECH) Market Demand from end-use industries such as paints & coatings, composites, adhesives, industrial & domestic cleaning products has been a key growth driver for the ECH market. The demand for lightweight and high-performance composites in the automotive and aerospace industries is further expected to drive its consumption over the coming years.

The epoxy resins market has witnessed growth in emerging economies of Asia Pacific and Latin America. This is encouraging key ECH producers to expand their production facilities in these regions to cater to the growing local demand. For instance, in 2023, Formosa Plastics Corporation announced plans to almost double its ECH production capacity in Point Comfort, Texas to meet the needs of its customers in the Americas region.

Market key trends

One of the major trends contributing to the growth of ECH market is its increasing utilization in the production of semiconductor packaging materials. ECH-based epoxy molding compounds are widely used for encapsulating and protecting integrated circuits and semiconductors from environmental hazards. The booming electronics industry worldwide is positively impacting the demand for ECH from this application segment.

Porter's Analysis

Threat of new entrants: ECH market requires high capital investment for building plants and facilities which acts a barrier for new players. Bargaining power of buyers: There exist numerous buyers in end use industries for ECH like resins & polymers, but individual buyers have low bargaining power due to availability of substitutes.

Bargaining power of suppliers: Raw materials for manufacturing ECH are commoditized in nature with easy availability from multiple suppliers globally, reducing their bargaining power.

Threat of new substitutes: Alternate chemicals like propylene oxide are used for similar applications but involve high conversion costs. ECH still retains advantage of functionality and cost effectiveness over substitutes.

Competitive rivalry: The global ECH market is moderately concentrated with top players having significant market share. Competition is based on reliability of supply, product differentiation and pricing.

Geographical Regions

Asia Pacific region accounts for the largest market share in terms of value led by China, which is the largest producer and consumer of ECH globally. North America and Western Europe are other major regions driven by huge demand from adhesive, paints & coatings industries.

The ECH market in Middle East and Africa region is witnessing fastest growth led by countries like Saudi Arabia and UAE. Huge ongoing investments in infrastructural projects and growth in end use industries are driving increased consumption of ECH for various applications in the region.

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