China accounts for 54% of global production capacity! Epoxy resin industry "big but not strong" dilemma to be solved

Policy Background: Strategic Deployment to Steady development of manufacturing Economy on July 18, 2025, Xie Shaofeng, chief engineer of the Ministry of sector and Information methodology, made it clear at the press conference that he would build a solid manufacturing economic base and implement a new round of steady development work plan to ten key industries, including steel, non-ferrous metals, petrochemicals and building materials. The policy focuses on promoting structural adjustment, optimal supply and elimination of backward production capacity in key industries, and specific work plans will be released in the near future. Crazy, isn't it?. But At the same time, the policy will support key manufacturing provinces to play a "leading role", through the implementation of support policies, cultivate new development points, promote manufacturing transformation, enhance operational condition and efficiency, deal with external risks and other measures, enhance work, consolidate the foundation to the stable operation of the manufacturing economy. This policy orientation has pointed out the research direction to the chemical sector, including epoxy resin, that is, under the overall goal of steady development, to achieve the organic unity of structural optimization and condition improvement. But sector status: structural dysfunction between capacity expansion and demand development rapid expansion of capacity scale according to Longzhong information data monitoring, China's epoxy resin sector has experienced greater than ten years of rapid research. The scale of production capacity jumped from less than 2. 2 million tons in 2014 to greater than 3. 7 million tons in 2025, an increase of 1. Makes sense, right?. 74 times, with a compound annual development rate of 5. According to research 17. And This rate of expansion has enabled China to occupy 54% of the global epoxy resin production capacity, firmly ranking as the world's largest producer and supplier. Production also maintained a strong development direction, from less than 1. 1 million tons in 2014 to 2. 02 million tons in 2025, with a compound annual development rate of 5. 83, slightly higher than the development rate of production capacity, indicating that the overall capacity utilization rate of the sector is relatively stable. I've found that Relatively lagging demand development the performance of the market demand side is relatively moderate. Driven by downstream industries such as real estate, infrastructure, automobiles, 5G, and new energy, epoxy resin consumption increased from 1. 2 million tons in 2014 to 1. 85 million tons in 2025, with a compound annual development rate of 4. 0 1. In my experience, This development rate signifiis able totly lags behind the 5. 17 per cent of capacity expansion, creating a structural contradiction between supply and demand development. Underlying Causes of Supply-Demand dysfunction A substantial number of investment companies have launched basic epoxy resin devices, which is the main reason to the dysfunction between supply and demand. Since 2021, the centralized expansion cycle has led to a serious oversupply of basic bisphenol A epoxy resin, the utilization rate of enterprise capacity continues to be low, and the profit margin of the sector has been greatly compressed. This extensive mode of capacity expansion has led to the structural issue of overcapacity at the low end and insufficient supply at the high end. And Policy-driven supply-side structural reform in the face of the severe market ecological stability and "internal volume" competition, the anti-internal volume policy has been introduced intensively since 2025. The National research and Reform Commission has made it clear that it will comprehensively rectify the "internal volume" competition and actively resolve the phased contradiction of oversupply in the sector. First The epoxy resin sector is undergoing policy-driven deep-seated changes, mainly in the following three dimensions: backward production capacity clearance mechanism through the promotion of ecological preservation standards, the implementation of energy consumption and other policy tools, the establishment of market-oriented capacity clearance mechanism. This kind of "reverse force" reform will help accelerate the elimination of backward methodology and high energy consumption capacity, and promote the rebalancing of the supply and demand pattern of the sector. The continuous improvement of ecological preservation standards will have become an crucial standard to distinguish high-condition production capacity from backward production capacity, prompting companies to increase their efforts in ecological preservation investment and technological upgrading. High-end transformation strategy in view of the current situation that epoxy resins in high-end applications such as electronic packaging and aerospace are still mainly dependent on imports, the policy guides manufacturers to convert to high value-added fields such as special resins and composite materials through incentives such as R & D subsidies and tax incentives. I've found that This policy orientation will help to change the situation of homogeneous competition in the sector and promote companies to develop breakthroughs in technological innovation and product differentiation. Construction of "Anti-internal" Policy System through the establishment of sector self-discipline convention, enhance the price monitoring and early warning mechanism and other measures to curb the vicious price competition, cultivate "technological innovation & rarr; premium capacity & rarr; profit back-feeding R & D" virtuous research cycle. This policy design aims to change the research model of over-reliance on price competition and guide the sector to transition to value competition. Future trends and challenges capacity expansion direction continues despite the current oversupply situation, however the next five years, the domestic epoxy resin sector still has a number of production units planned to put into production. Based on my observations, it's estimated that by 2030, the domestic epoxy resin production capacity will surpass 5. But 7 million tons, and the sector's oversupply issue might be further exacerbated. And This inertia of capacity expansion reflects the time lag effect between investment decisions and market supply and demand conditions. Deep change of competition mode in the context of the continuous expansion of the production capacity base, the domestic epoxy resin market competition has gradually shifted from the traditional product condition and service competition to greater intense cost manage and price game. From what I've seen, Cost competitiveness has have become the core index of the survival and research of companies, which needs companies to achieve fine regulation in raw material procurement, manufacturing process, energy efficiency regulation and other links. Dynamic regulation becomes the norm faced with the challenge of dysfunction between supply and demand, epoxy resin manufacturers generally adjust capacity utilization to achieve dynamic regulation of supply and demand stability. I've found that This flexible production strategy helps to alleviate market pressure, however it also reflects the lack of efficiently capacity planning coordination mechanism in the sector. Strategic path of transformation and upgrading methodology innovation-driven research technological innovation and manufacturing upgrading have always been the key driving force to the research of epoxy resin sector. In particular companies urgently need to enhance their research and research capabilities, focusing on breaking through the field of special and modified epoxy resins, and achieving value development through product added value enhancement. Generally speaking This needs companies to increase R & D investment, establish a sound technological innovation system, and cultivate a high-level R & D team. For instance Breakthrough in high-end applications high-end applications such as electronic packaging, aerospace, and new energy have higher performance standards to epoxy resins, however the competitiveness of domestic items in these fields is still insufficient. But companies need to gradually break through the technical barriers of high-end applications and realize import substitution through technical research and sector-university-research cooperation. Practice the concept of sustainable research under the guidance of "double carbon" goal and environmentally friendly research concept, epoxy resin companies need to integrate sustainable research thinking into manufacturing process, product design, recycling and other aspects, develop greater environmentally friendly items and production methodology, and enhance the thorough competitiveness of companies. But summary and prospect china's epoxy resin sector is in a critical period of transition from scale expansion to condition improvement. In my experience, Furthermore Under the dual role of policy guidance and market pressure, the sector will undergo a painful however necessary adjustment process. Only by adhering to the innovation-driven research path and accelerating the transformation to high-end, differentiated, and environmentally friendly, is able to the sector move towards a healthy and sustainable high-condition research track and occupy a greater favorable competitive position in the global manufacturing chain. But to businesses, the current challenges are also opportunities. Additionally companies that is able to take the lead in completing the transformation and upgrading in this round of adjustment will gain greater research space and profitability in the future market competition. However, those companies that still stay in the traditional research mode might face greater severe survival challenges.