EPICHLOROHYDRIN (ECH) MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024 - 2031)

Epichlorohydrin (ECH) Market Size and Trends

The global epichlorohydrin (ECH) market is estimated to be valued at USD 2.95 Bn in 2024 and is expected to reach USD 4.17 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 5.1% from 2024 to 2031.

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ECH (epichlorohydrin) is primarily used in the production of epoxy resins, which have broad applications in adhesives, paints & coatings, composites, and electrical & electronics industries. The market for ECH is expected to grow due to the increasing demand from the construction and automotive sectors, as well as the rising need for high-performance coatings. ECH-based epoxy resins are used in strong bonding applications, including in automotive manufacturing, electronics assembly, and construction.

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Insights By Application: Epichlorohydrin's Increasing Application in the Production of Epoxy Resins

In terms of application, Epoxy Resins segment is estimated to hold 40.3% share of the market in 2024.  Epichlorohydrin (ECH) plays a critical role in various applications, especially in the production of epoxy resins. Growing use of epoxy resins in the manufacturing of protective coatings for metal structures, vessels, floor coatings, and fiber-reinforced composites used in aerospace and wind power generation industries is likely to drive the segment growth.

Insights By End-use Industry: Automotive Leads in Epichlorohydrin-Based Epoxy Resin Consumption

In terms of end-use industry, automotive segment is estimated to hold 36.5% share of the market in 2024, owing to widespread utilization of epoxy resins. Within the end-use industry segments, automotive has emerged as the major consumer of epichlorohydrin in the form of epoxy resins. Epoxy resins synthesized using epichlorohydrin exhibit excellent adhesion, corrosion resistance, and mechanical strength. These properties make them irreplaceable in numerous automotive applications such as coatings, adhesives, composites, and electrical insulation.

Regional Insights

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Dominating Region: Asia Pacific

Asia Pacific region is estimated to hold 38.5% share of this market in 2024. This dominance is primarily driven by the presence of rapidly developing countries such as China, Taiwan, and Malaysia, which are significant consumers of epichlorohydrin. Moving forward, markets in India and Taiwan are projected to experience strong growth, fueled by increasing demand from key industries like construction and electronics manufacturing. Additionally, the rise in petroleum refining activities and the growing demand for epoxy resins are expected to further drive market expansion in these regions.

Fastest-Growing Region: North America

North America is emerging as the fastest growing regional market for epichlorohydrin (ECH). Growing optimism across industries with high demand for specialty chemicals is driving the need for epichlorohydrin. The U.S., which is the leading consumer of epichlorohydrin in the region, has taken a more cautious approach to economic growth. Meanwhile, Canada's introduction of stricter regulations on epichlorohydrin is expected to reduce demand. However, capacity expansions and capital investments are anticipated to play a significant role in fueling continued demand for epichlorohydrin in the region.

Global Epichlorohydrin (ECH) Market Outlook for Key Countries

Sustainability Initiatives in the U.S. Epichlorohydrin (ECH) Market

The U.S. epichlorohydrin (ECH) market growth is driven by demand from the paints and coatings industry, particularly in the automotive and construction sectors. The country's focus on infrastructure development and technological innovation supports the growth of the Epichlorohydrin (ECH)market. The U.S. Department of Energy's initiatives such as Clean Energy Manufacturing Initiative (CEMI) to improve chemical output sustainability further bolster the market growth.

India's Growing Role in the Epichlorohydrin (ECH) Market: Infrastructure Development and Capacity Expansion

India is emerging as a significant player in the epichlorohydrin (ECH) market, propelled by rapid industrialization and infrastructure development. The country's investment in infrastructure, including roads, highways, urban development, and railways, is expected to drive the demand for ECH-based products. In India, Meghmani Finechem commissioned a new ECH plant in Dahej, Gujarat, with an annual capacity of 50,000 tons in 2022. This project, valued at US$ 3.29 million, reflects the company's commitment to expanding its chemical production capabilities.

Industrial Strength and Infrastructure Investments in China

China stands as the largest producer and consumer of ECH globally, primarily due to its robust industrial base and expanding infrastructure projects. The country's dominance is attributed to the abundant availability of raw materials and a strong demand for epoxy resins in various sectors, including construction and electronics. In August 2022, China announced that it would be spending US$ 44 billion (300 billion yuan) on infrastructure development and announced more stimulus policies for growth in this sector.

Growth Amid Sustainability and Regulatory Changes in Canada

Canada's Epichlorohydrin (ECH) market is relatively small compared to other countries but is growing steadily. The country's chemical industry is adopting environmentally friendly technologies, aligning with global trends toward sustainability. The implementation of stricter laws against epichlorohydrin in Canada may influence market dynamics.

Market Concentration and Competitive Landscape

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Top Strategies Followed by Global Epichlorohydrin (ECH) Market Players

• Established Players: Leading companies in this market focus extensively on research and development to innovate high-performance products. For instance, Solvay SA invests over 5% of its annual revenue in R&D with the aim of developing novel epichlorohydrin derivatives and resins. The company has a dedicated research facility in the U.S. working on cutting-edge applications in areas such as composites, coatings, and adhesives.
• Mid-Level Players: Mid-sized players in this market focus on providing cost-competitive solutions. Hanwha Solutions, for example, leverages economies of scale at its production facilities in South Korea to offer price-competitive ECH and downstream products without compromising on quality.
• Small-Scale Players: Niche players look at specialized application areas. For example, PTT Global Chemical focuses on developing ECH-based coating resins for infrastructure applications leveraging Thailand's strong construction industry. The company has also collaborated with domestic research institutes to advance relevant coating technologies.

Emerging Startups in the Global Epichlorohydrin (ECH) Market

In terms of innovative technologies, startups like Gevo have been working on producing epichlorohydrin from renewable resources, specifically bio-based glycerol derived from plant-based feedstocks. Their approach aims to replace traditional fossil fuel-based ECH production with more sustainable methods, helping reduce carbon emissions and the environmental footprint.

Some startups contribute to sustainability. For instance, Carbios develops enzymatic processes to recycle plastic waste, including epoxy resins, thereby reducing industrial dependence on petroleum-based ECH. Canada-based Cirulium Power focuses on ECH-derived electrolytes for next-gen lithium-ion batteries with higher energy density.

By addressing untapped niches, startups complement existing industry players. New York-based ParaCoat Technologies develops water-based ECH coatings for infrastructure repair, minimizing volatile organic compound emissions. India's Curechem employs 3D printing to produce customized ECH-cured parts on demand for industries with small batch requirements.

Epichlorohydrin (ECH) Industry News

• In August 2024, Dow Chemical revealed plans for a comprehensive upgrade to its propylene-based ECH production facilities, integrating state-of-the-art technologies to enhance operational efficiency and environmental sustainability
• In July 2024, the U.S. Department of Energy published a paper highlighting the potential of innovative propylene processing technologies to significantly improve the sustainability of chemical production. The paper emphasized the need for increased research and development funding to advance these technologies, reflecting strong government backing for initiatives that could drive growth of the market
• In February 2024, BASF announced a substantial investment in R&D to innovate a new generation of ECH derivatives. This effort aims to expand their product portfolio and address emerging needs in the pharmaceutical and agricultural industries.
• 2021, Hexion, Inc. formed a strategic partnership with a leading automobile manufacturer such as Ford Motor Company’s JEC (Ford F-150 Model) to provide high-performance ECH-based resins for advanced composites, underscoring the company's dedication to advancing its automotive applications

Key Takeaways from Analyst

• The epoxy resins application segment currently dominates the market and is likely to maintain its leading position over the forecast period. Epoxy resins synthesized using ECH find wide usage in industrial coatings, composites, adhesives, and electrical laminates.
• Asia Pacific is projected to be the fastest growing as well as the largest regional market owing to buoyant demand from China and India. Both countries are major consumers as well as producers of ECH globally. Rising construction activities in the region are also pushing the usage of epoxy resins and adhesives. North America are relatively mature markets but will continue exhibiting steady gains due to growing end-use industries.
• Stringent environmental regulations concerning the production and usage of ECH may act as a restraint. However, manufacturers are increasingly investing in R&D to develop eco-friendly production processes. Availability of raw materials is another challenge as ECH is primarily derived from epichlorohydrin obtained from propylene.

Market Report Scope

Market Dynamics

Market Driver - Growing demand for epoxy resins in various applications, particularly in the automotive and construction industries

One of the key factors driving the market growth is the growing demand for epoxy resins in various applications, especially from the automotive and construction industries. Epoxy resins are the main derivatives of epichlorohydrin and find widespread applications due to their excellent adhesive properties and chemical resistance. In the automotive industry, epoxy resins are used in various components such as bodies, bumpers, trims, and interior parts to provide strength and durability. With the increasing vehicle production globally, the demand for epoxy resins from automotive OEMs and component manufacturers is surging. For instance, in July 2024, several green building projects in North America used epoxy resins in their construction to achieve sustainability certifications like LEED.

Market Challenge - Fluctuating raw material prices affecting production costs

One of the major challenges faced by the market players is the fluctuating prices of key raw materials that are used in the production of ECH. Epichlorohydrin is primarily manufactured from propene and chlorine as the key raw materials. The prices of both propene and chlorine are highly dependent on the fluctuations in crude oil prices in the global market. Any increase in crude oil prices often leads to a hike in the prices of propene and chlorine, inflating the production costs for ECH manufacturers.

Market Opportunity - Innovations in ECH production processes enhancing efficiency and reducing costs

One of the key opportunities for the players in this market is to focus on innovations and developments to enhance the efficiency of ECH production processes. This can help in optimizing the production costs in the long run. Various ECH manufacturers are investing in advanced process technologies like continuous production methods and membrane separation techniques. This helps in reducing wastage during production and achieving higher yields. Some companies are also exploring the use of renewable feedstocks like glycerol to replace traditional petrochemical-based raw materials. This can lower input costs dependence on volatile crude oil prices.

Market Segmentation

• By Application Insights (Revenue, USD Bn, 2019 - 2031)
• • Epoxy Resins
  • Synthetic Glycerin
  • Water Treatment Chemicals
  • Others
• By End-use Industry Insights (Revenue, USD Bn, 2019 - 2031)
• • Automotive
  • Construction
  • Electronics
  • Healthcare
  • Others
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
• • 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
  • Koppers Inc.