Throughout February 2024, the global 2-Ethylhexanoic Acid (2-EHA) market maintained its upward progression, consistent with the trend observed in the previous two months. The escalation in the cost of raw material crude oil during this timeframe contributed to increased production expenses, consequently driving up the prices of 2-EHA. Strong demand from the automotive sector downstream and persisting uncertainties in trade were significant factors sustaining the upward movement of 2-EHA prices.

In the USA, Europe, and Brazil, the 2-EHA market experienced a notable uptrend, buoyed by economic improvements and strong demand from the downstream automotive and construction sectors. This shift towards positivity marked a departure from the prolonged period of sluggishness attributed to subdued demand for 2-EHA in the importing market. The resurgence of the construction sector in the USA showed promising signs of recovery, further fuelling the increase in 2-EHA prices.

The advancements in the US construction industry were evident through a rise in renovation projects within the hotel sector and a shortage of existing homes across the country, prompting an escalation in housebuilding activities. The overall favourable trading atmosphere in these pivotal markets provided solid support for the upward momentum. Consequently, with the continual steady growth in construction activities, the demand for 2-EHA, a vital component in paints and coatings, remained robust. To leverage these advantageous market conditions, OQ Chemical, a prominent global player in oxo products, adjusted their prices for 2-EHA in the USA. This strategic manoeuvre is anticipated to reinforce the upward trajectory of 2-EHA prices in the forthcoming month as well.

Similarly, the Asian 2-EHA market has witnessed a sustained upward trajectory in prices recently, primarily attributed to a shortage in supply and expensive imports from international markets. Insights gathered from various market participants indicate that some major manufacturers of 2-EHA, predominantly based in the exporting country USA, have temporarily halted production at specific units for maintenance purposes, resulting in a significant material shortage and decreased exports to India. However, other notable market players, such as BASF and OQ Chemicals, are capitalizing on this situation by raising the material's price. OQ Chemicals, a prominent global leader in oxo products, has responded to the favourable market conditions by adjusting their prices for 2-EHA in the global market. This strategic move is expected to further bolster the upward trajectory of 2-EHA prices in the upcoming month. Furthermore, the demand for 2-EHA from the downstream automotive sector has remained steady since the beginning of the year.

Insights from various market participants indicate that the electric vehicle industry showed promising growth in 2024, with approximately 1.44 million battery-powered vehicles registered overall. During the post-FAME subsidy reduction period, electric two-wheelers recorded the second-highest monthly number of registrations. Consequently, with the ongoing steady increase in automotive sales, the demand for 2-EHA, a vital component in various automotive paints and coatings, remained strong. The combination of these factors has led to a widening gap between demand and supply, thereby supporting the current price surge.