During the first week of May 2024, the global 2-Ethylhexanoic Acid (2-EHA) market experienced an upward trajectory, despite Propylene prices decreased and demand subdued from the automotive sector. This surge resulted from a material shortage driven by a shortage of truck drivers and ongoing trade uncertainties in the Red Sea region. Furthermore, OQ Chemicals, a prominent player in oxo intermediates and derivatives, announced a price increase for its 2-EHA product in the USA, extending globally, reflecting broader market dynamics.

The North American 2-EHA market has demonstrated a persistent upward trend, registering a marginal price increase of 0.3%. This escalation is chiefly attributed to a material shortage within the North American market, aggravated by ongoing trade uncertainties and a shortage of truck drivers, which has exacerbated supply chain constraints. The situation was further compounded by the Labour Day holiday observed in exporting country China from May 1st to May 5th. Moreover, the shutdown of Baltimore's inner harbour has compounded challenges in the shipping sector, disrupting logistics networks and impacting local shipping interests. While detrimental to Baltimore's shipping operations, this shutdown has redirected traffic to other East Coast ports, contributing to delayed or restricted shipments of 2-EHA to the USA market, thereby exacerbating the material shortage.

Further, during this period, fluctuations in demand of 2-EHA from end-use sectors such as paints and coatings have been observed, partially influenced by the subdued performance of the downstream automotive sector. New light-vehicle sales in April 2024 reached a Seasonally Adjusted Annual Rate (SAAR) of 15.74 million, reflecting a modest decline of approximately 2%-3% from the previous month. Notably, Hyundai and Kia experienced declines of 3% and 4%, respectively, while Toyota saw a 15% increase, primarily attributed to a wider availability of hybrid vehicles. Subaru and Honda also saw respective increases of 10% and 3% in sales. These fluctuations in the automotive industry have directly impacted the demand for 2-EHA, a critical component utilized in automotive paints and coatings.

The European 2-EHA market has sustained its upward price trajectory, reflecting a trend seen in the previous month, albeit with marginal changes. Despite declining prices of essential raw materials like Propylene and Crude Oil, their cost pressure exerted limited influence on 2-EHA prices. The current price surge is primarily attributed to material shortages within the market, further compounded by a price increase announced by OQ Chemicals, a major 2-EHA manufacturer, at the month's outset. Consequently, small-scale traders have adjusted prices upward to protect their profit margins.

Additionally, demand for 2-EHA remained robust, driven by a strong performance in the automotive sector. However, the cooling demand for electric vehicles following the government subsidy phaseout suggests evolving market preferences. The interplay of these factors prompted towards widened disparity between demand and supply thus supporting the current price surge of 2-EHA.