Diverging Paths for 2-EHA: Steady in Asia, Declining in North America Amid Market Fluctuations

The price of 2-Ethylhexanoic Acid (2-EHA) displayed a divergent trend in the global market during the first half of October 2024. In the Asian market, 2-EHA prices remained stable despite of fluctuating demand from the automotive sector. In contrast, the North American market saw a sharp decline in prices amidst sufficient supplies and eased freight charges.

In China, the 2-EHA market maintained stable prices despite high demand, with traders effectively managing market conditions. There were sufficient 2-EHA inventories available to meet end-user demand. Additionally, the stable prices of Propylene and 2-EH, essential raw materials in 2-EHA production, provided further cost support, helping to maintain stable 2-EHA prices during this period.

However, on the demand side, variations were observed, primarily due to the robust performance of the automotive sector, a key end-user. In September 2024, passenger vehicle sales in China rose by 4.3% year-on-year, reversing five consecutive months of decline. This increase was largely driven by a government subsidy promoting trade-ins as part of a broader stimulus package. This sales momentum is expected to continue into October, particularly with the Golden Week celebrations.

On the contrary, the prices declined in the USA market during this period. On the supply side, sufficient inventories of imported 2-EHA have been available in the market, despite challenges such as strikes at U.S. ports and delays in shipments. Recent market insights reveal that the global freight industry has experienced a significant decline in costs. Reports from various market participants indicate that freight costs have decreased by almost 4% during the first week of October 2024 for shipments from Shanghai to New York. This substantial reduction reflects a broader softening of the freight market, characterized by a sharp decline in spot freight rates across major container lanes. This trend is creating a more favourable shipping environment, which could enhance the competitive pricing of imported goods, including 2-EHA. 

In terms of demand, purchasing activities for 2-Ethylhexanoic Acid (2-EHA) have remained modest. The automotive sector, a key end-user of 2-EHA, has shown only limited performance recently, contributing to overall stability in demand for the chemical. Insights gathered from various market participants indicate a seasonally adjusted annual rate (SAAR) of 16.0 million units for vehicle sales, representing a notable increase from the 15.2 million unit reading in August. This fluctuation reflects a volatile pattern in auto demand that has persisted since October 2024. 

According to ChemAnalyst, the price of 2-EHA is expected to rise in the coming months, driven by strong demand from the downstream market. Upcoming festive seasons may further boost purchasing activities globally, contributing to the anticipated price increase.