US 2-Ethylhexanol Price Hikes in April 2024, Takes Support from Price Revisions by Producers

The US 2-Ethylhexanol (2-EH) market has witnessed a marginal inclination of approximately 2%, due to moderate demand conditions and the announcement of price hikes by one of the major oxo-alcohol producers.

Support for the prices of 2-EH was not present from the feedstock side as prices of Propylene (refinery grade) remained relatively stable during this timeframe. Moreover, the construction sector of the US has been forecasting a bearish outlook, as indicated by the inclining mortgage rates, which also can have a negative impact on the demand conditions of 2-EH from the downstream paints and coating and plasticizer industry.  On April 18, 2024, mortgage rates exceeded 7%, for the first time during this year, according to Freddie Mac. As mortgage rates trend higher, potential homebuyers decide whether to make transactions in the real estate market before rates rise further or hold off in hopes of decrements later this year, thereby keeping demand conditions uncertain. Purchase applications rose modestly last week, but it remains unclear how many homebuyers can withstand increasing rates in the future, despite the present spring demand of the homebuying season. As of now, the US housing market continues to be driven by the perennial shortage of second-hand houses which continues to keep construction activities at a healthy level along with providing support to the real estate market, consequently providing support to the US 2-EH market.

Moreover, the prevailing ‘spring bounce’ also has not fully materialized in the automotive industry leading to a weakening of support for 2-EH from the demand side from the downstream automotive paints and coating industry. The "spring bounce," in which some Americans choose to utilize their tax refunds as down payments on new cars or simply feel eager to purchase a new automobile due to improving weather conditions, appeared to have fallen flat in April 2024. Automotive sales volume during April 2024 has fallen 2.2% from April 2023 to 1.34 million units, further forecasting a bearish situation for the US 2-EH market.

However, increments in the prices of 2-EH across the US market are attributed to the price hike of USD 110/MT announced by a major oxo-alcohol producer, namely Eastman Chemicals in a press release, dated March 14, 2024, already in effect from April 1, 2024.  This provided some support to the US 2-EH market.

Overall prices of 2-EH are expected to increase due to a healthy consumption rate attributed to the ongoing activities in the construction sector and a rise in the prices of feedstock Propylene (refinery grade) in May 2024.