OQ Chemicals Announces Price Increase for 2-Ethylhexanol, Effective from March 2024

Prices of 2 Ethyl hexanol (2-EH) are anticipated to increase globally as OQ Chemical, a leading oxo-alcohol manufacturer announces price hikes for the for the product in the global market with effective from March 1, 2024. On February 15, 2024, OQ Chemicals announced prices hikes of EUR 100/MT for the European market and 110/MT in the prices of 2-EH for the North American, and Asian market respectively.

In terms of supply, prices of feedstock Propylene (Chemical Grade) are further anticipated to show an increment in the global market which is anticipated to increase production costs of 2-EH. The present challenges in the supply chain system were recorded to have been persistent which continued to increase transportation costs.

On the demand side, demand of 2-EH from the downstream plasticizer and paint industry from the construction and automotive sector was recorded to be healthy in North American and Asian markets. Across the US market, commercial building and housebuilding segments mainly provided support for the 2-EH market as mortgage rates were recorded to have increased with current mortgage rates being recorded at 6.77% and 6.12% for a 30-year and 15-year fixed term contract, respectively. In terms of the commercial building segment, major hotel players were recorded to have observed an increment in the number of projects and renovations therefore further pressuring the demand for 2-EH. Moreover, despite the automotive sector continuing to witness a slowdown, residential housebuilding sector continued to improve on the back of perennial shortage of secondhand homes in the US market as evidenced by an increment in the number of outlays, and an anticipated high demand for housing in the spring months.

In the European market, prices of 2-EH continued to be driven increasing production costs of feedstock Propylene which continued to show an increment of 1.3% during the first half of February 2024, mainly due to crisis at the Red Sea which delayed imports of the feedstock from the exporting US market.  In terms of demand, demand for 2-EH continued to remain subdued as the construction sector continued to remain in retrenchment during February 2024, with project cancellations and declining permits. All three segments of the construction sector continued to remain subdued with significant contractions being witnessed in the housebuilding, commercial building, and civil engineering activities. This consequently continued to have a detrimental impact on the downstream plasticizer industry.

Across the Asian market, the market situation of 2-EH was also driven by high freight charges which led to expensive imports of the product and a moderate demand from the downstream plasticizer industry as demand returns due to upcoming Chinese Lunar New Year which is expected to witness an increment in the renovation activities.