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

Policy Background: Strategic Deployment for Steady Growth of Industrial Economy

on July 18, 2025, Xie Shaofeng, chief engineer of the Ministry of Industry and Information Technology, made it clear at the press conference that he would build a solid industrial economic base and implement a new round of steady growth work plan for 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. At the same time, the policy will support key industrial provinces to play a "leading role", through the implementation of support policies, cultivate new growth points, promote industrial transformation, improve operational quality and efficiency, deal with external risks and other measures, strengthen work, consolidate the foundation for the stable operation of the industrial economy.

This policy orientation has pointed out the development direction for the chemical industry, including epoxy resin, that is, under the overall goal of steady growth, to achieve the organic unity of structural optimization and quality improvement.

Industry status: structural imbalance between capacity expansion and demand growth

rapid expansion of capacity scale

according to Longzhong information data monitoring, China's epoxy resin industry has experienced more than ten years of rapid development. The scale of production capacity jumped from less than 2.2 million tons in 2014 to more than 3.7 million tons in 2025, an increase of 1.74 times, with a compound annual growth rate of 5.17. 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 growth trend, from less than 1.1 million tons in 2014 to 2.02 million tons in 2025, with a compound annual growth rate of 5.83, slightly higher than the growth rate of production capacity, indicating that the overall capacity utilization rate of the industry is relatively stable.

Relatively lagging demand growth

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 growth rate of 4.01. This growth rate significantly lags behind the 5.17 per cent of capacity expansion, creating a structural contradiction between supply and demand growth.

Underlying Causes of Supply-Demand Imbalance

A large number of investment enterprises have launched basic epoxy resin devices, which is the main reason for the imbalance 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 industry has been greatly compressed. This extensive mode of capacity expansion has led to the structural problem of overcapacity at the low end and insufficient supply at the high end.

Policy-driven supply-side structural reform

in the face of the severe market environment and "internal volume" competition, the anti-internal volume policy has been introduced intensively since 2025. The National Development 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 industry. The epoxy resin industry is undergoing policy-driven deep-seated changes, mainly in the following three dimensions:

backward production capacity clearance mechanism

through the promotion of environmental protection 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 technology and high energy consumption capacity, and promote the rebalancing of the supply and demand pattern of the industry. The continuous improvement of environmental protection standards will become an important standard to distinguish high-quality production capacity from backward production capacity, prompting enterprises to increase their efforts in environmental protection 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 transform to high value-added fields such as special resins and composite materials through incentives such as R & D subsidies and tax incentives. This policy orientation will help to change the situation of homogeneous competition in the industry and promote enterprises to seek breakthroughs in technological innovation and product differentiation.

Construction of "Anti-internal" Policy System

through the establishment of industry self-discipline convention, improve 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 development cycle. This policy design aims to change the development model of over-reliance on price competition and guide the industry to transition to value competition.

Future trends and challenges

capacity expansion trend continues

despite the current oversupply situation, but the next five years, the domestic epoxy resin industry still has a number of production units planned to put into production. It is estimated that by 2030, the domestic epoxy resin production capacity will exceed 5.7 million tons, and the industry's oversupply problem may be further exacerbated. 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 quality and service competition to more intense cost control and price game. Cost competitiveness has become the core index of the survival and development of enterprises, which requires enterprises to achieve fine management in raw material procurement, production process, energy efficiency management and other links.

Dynamic regulation becomes the norm

faced with the challenge of imbalance between supply and demand, epoxy resin manufacturers generally adjust capacity utilization to achieve dynamic regulation of supply and demand balance. This flexible production strategy helps to alleviate market pressure, but it also reflects the lack of effective capacity planning coordination mechanism in the industry.

Strategic path of transformation and upgrading

technology innovation-driven development

technological innovation and industrial upgrading have always been the key driving force for the development of epoxy resin industry. Enterprises urgently need to improve their research and development capabilities, focusing on breaking through the field of special and modified epoxy resins, and achieving value growth through product added value enhancement. This requires companies to increase R & D investment, establish a sound technological innovation system, and cultivate a high-level R & D team.

Breakthrough in high-end applications

high-end applications such as electronic packaging, aerospace, and new energy have higher performance requirements for epoxy resins, but the competitiveness of domestic products in these fields is still insufficient. Enterprises need to gradually break through the technical barriers of high-end applications and realize import substitution through technical research and industry-university-research cooperation.

Practice the concept of sustainable development

under the guidance of "double carbon" goal and green development concept, epoxy resin enterprises need to integrate sustainable development thinking into production process, product design, recycling and other aspects, develop more environmentally friendly products and production technology, and enhance the comprehensive competitiveness of enterprises.

conclusion and prospect

china's epoxy resin industry is in a critical period of transition from scale expansion to quality improvement. Under the dual role of policy guidance and market pressure, the industry will undergo a painful but necessary adjustment process. Only by adhering to the innovation-driven development path and accelerating the transformation to high-end, differentiated, and green, can the industry move towards a healthy and sustainable high-quality development track and occupy a more favorable competitive position in the global industrial chain.

For businesses, the current challenges are also opportunities. Enterprises that can take the lead in completing the transformation and upgrading in this round of adjustment will gain greater development space and profitability in the future market competition. However, those enterprises that still stay in the traditional development mode may face more severe survival challenges.