The year 2025 witnessed a fluctuating but overall upward trend in China's hydrogen peroxide market, albeit with annual average prices lower than the previous year. The first half saw soft demand and low operating rates, keeping prices subdued. Two minor price hikes during this period were primarily driven by concentrated plant maintenance. The market pivot occurred in late Q3, with the "Golden September and Silver October" period delivering a significant boost. Starting late September, anticipated supply reductions in Northern China, coupled with seasonal demand recovery and strong bullish sentiment, triggered a rapid price surge that spread to key consumption regions like East China. The price peaked on October 20th, with the national average for 27.5% H2O2 reaching 851 RMB/ton. The year ended with another upward trend, supported by concentrated plant turnarounds in Central and Southern China and robust demand from the new energy sector. Annual averages for 2025 stood at 694 RMB/ton for 27.5% grade and 1,380 RMB/ton for 50% grade.

Phase-by-Phase Market Movement:

• Q1 Tentative Increase (Late Feb - Mid-Mar): A post-Lunar New Year demand gradual recovery, combined with plant maintenance, led to price increases initiated in East China. This short-lived rally had limited scope and magnitude.

• Mid-Year Regional Rally (From Early June): Supply tightness in Shandong and Hebei—key production hubs—due to safety inspections and incidents, fueled consecutive price hikes. This rally, stronger than Q1's, also influenced neighboring markets like Jiangsu, Zhejiang, and Anhui.

• Peak Season Sharp Rally (Late Sep - Oct): This was the most pronounced rally of the year. Concentrated plant shutdowns in the North created supply concerns, coinciding with seasonal demand uptick. Bullish sentiment fueled a sharp price increase that spread rapidly. Planned maintenance in the Jiangsu-Zhejiang region added to supply-side support.

• Year-End Rally on Dual Drivers (From Dec): Healthy November order bookings kept producer inventories low. Simultaneously, plant maintenance in Central/Southern China met solid demand from the paper industry and particularly vigorous demand from the new energy sector (e.g., lithium iron phosphate), pushing prices upward until year-end.

Evolving Supply Landscape:
China's total H2O2 capacity continued expanding in 2025, with several new plants coming online, adding approximately 1.63 million tons of capacity (calculated as 27.5%). The country hosts around 121 active producers, with capacity heavily concentrated in Eastern provinces like Shandong, Jiangsu, Anhui, and Zhejiang. Shandong alone accounts for nearly a quarter of national capacity, maintaining its dominant role. New capacity additions contributed to a generally well-supplied market.

Diversifying Demand Patterns:
Demand from traditional downstream sectors like paper, textile dyeing, and caprolactam was weak in H1 2025. Improvement came in late Q3 with the peak season. Paper industry procurement provided solid support, and textile dyeing demand recovered notably from mid-late August. A key highlight was the consistently strong demand from the new energy industry chain (especially LFP-related processes) starting in H2, emerging as a significant consumption growth pillar. However, demand from sectors like propylene oxide (HPPO route) remained limited due to industry-specific challenges.

Import and Export Flows:
China's H2O2 import and export volumes remained relatively stable in 2025. Imports saw a slight year-on-year increase, mainly sourced from South Korea, Thailand, Taiwan (China), etc. Exports experienced a minor decrease, with Southeast Asia remaining the primary destination. Subtle shifts in trade flows indicated regional adjustments in global supply chains.

Market Outlook for 2026:
Looking ahead to 2026, the fundamental landscape of "supply growth outpacing demand growth" is expected to persist.

• Supply Side: Substantial new capacity, often downstream-integrated, is anticipated, potentially intensifying competition in regions like Southwest China. The national policy to phase out outdated "acid-base fixed bed" technology reaches a critical stage; stricter enforcement could alleviate localized oversupply temporarily. The adoption of advanced "fluidized bed" technology will enhance the cost competitiveness of new plants. Inter-regional product flow may decrease further as downstream integration deepens.

• Demand Side: Capacity expansion in traditional sectors like caprolactam and pulp is tapering, while demand from emerging sectors like propylene oxide, new energy, and electronics is projected to grow rapidly. However, mismatched growth rates between upstream and downstream could cause periodic imbalances. Niche applications (e.g., specialty chemical synthesis, environmental protection/disinfection) may present new demand opportunities.

• Price Forecast: Overall, the H2O2 market in 2026 is expected to experience low-level volatility. Key production bases or regions with concentrated new capacity may face periodic price pressure. The cost curve will be a crucial factor determining plant operating rates. The national average price for 27.5% H2O2 is forecasted to fluctuate within the range of 600-750 RMB/ton.