Published July 2014
Epichlorohydrin is a liquid epoxide most frequently manufactured by the chlorohydrination of allyl chloride. The principal uses for epichlorohydrin are in the production of epoxy resins (its primary use), synthetic glycerin, epichlorohydrin elastomers, specialty water treatment chemicals, wet-strength resins for paper production and surfactants.
The epichlorohydrin industry has been hurt by the aggressive building of capacity in China. While most epichlorohydrin is used to make epoxy resins, that business has experienced overcapacity, with operating rates in the 60–70% range in recent years, resulting in negative profitability. In late 2013, Dow announced plans to divest its global epoxy operations, possibly including the associated epichlorohydrin plants.
The following pie chart shows world consumption of epichlorohydrin:
In their cured form, epoxy resins possess outstanding properties, including toughness, resistance to moisture and chemicals, high tensile strength and good dielectric properties. They are used in a variety of applications. Protective coatings are the largest market in the United States, accounting for over half of U.S. consumption; other large markets for unmodified epoxy resins include bonding and adhesives; glass fiber–reinforced vessels, pipes and structural materials; and electrical laminates and encapsulations.
Epoxy resin production is the largest end use for epichlorohydrin in Western Europe, accounting for about 80% of total Western European consumption of epichlorohydrin. Total Western European epichlorohydrin consumption declined in 2011–2013, primarily because of decreased epoxy resin production; however, consumption growth is expected to resume as a result of greater automotive production and demand from other end uses, at an average annual rate of over 3% during 2013–2018.
In Japan, the largest epichlorohydrin-consuming sector is epoxy resins, accounting for almost 70% of the total in 2013, a decrease from 80% in 2010. Since 2000, epoxy resin demand for both surface coatings and electrical applications has decreased and stagnated. Demand decreased in 2009 as a result of the global recession but recovered in 2010 with the improved world economy. It decreased again in 2013 because of Dows cessation of epoxy resin production in Japan.
Chinese production and consumption of epichlorohydrin increased significantly during the early to mid-2000s; Chinese imports of epichlorohydrin have declined since the mid-2000s. China became the worlds largest epichlorohydrin-consuming country during that time. Epichlorohydrin is used primarily for the production of epoxy resins, accounting for approximately 97% of total consumption. Chinese consumption of epichlorohydrin is forecast to grow at an average annual rate of about 5% through 2018.