Price Increase by OQ Chemicals Keeps 2-EHA Prices Buoyant in US Throughout November 2023

After witnessing the prolonged dullness and the rollover demand in the USA market, the 2-Ethylhexanoic Acid (2-EHA)  prices have finally taken an upswing and heading toward positive momentum throughout November. The combination of higher raw material costs as well as the healthy demand left the manufacturers with no choice, and therefore, OQ Chemicals, a global leader in oxo intermediates and derivatives, has announced a price increase for its 2-EHA product in the USA. However, the price rise was not only limited to the USA but also to the rest of the world. The price hike for 2-EHA is reflected in the offered quotations to register about + 99.2 USD/mt in North America while around +100 USD/mt in Europe and ROW effective from November 1, 2023.

In a refreshing turn of events, the US 2-EHA market surprised everyone with its remarkable growth in November. While many anticipated further declines, prices held firm, defying expectations to settle within a 3% hike at 2713 USD/ tonne 2-EHA CFR, New York, in the week ending of November 2023. The price increase for 2-EHA in the USA took effect on November 1, 2023. However, OQ Chemicals noted that the increase might be applied earlier or later depending on existing contracts with customers. This flexibility ensures a smooth transition for both parties. This move comes from a confluence of factors, including logistical challenges and increased consumption in the downstream automotive industry. As per the market reports, November saw US new vehicle sales hit the gas pedal, racing ahead by 2.7% compared to October 2023. This impressive surge wasn't just a short-term burst; it also marked an 8.9% leap over November 2022, proving the car market's resilience and potential for sustained growth. Henceforth, as demand outpaces supply, manufacturers like OQ Chemicals are forced to adjust their pricing strategies for 2-EHA accordingly.

Moreover, the soaring raw material costs were highlighted, which were putting a strain on OQ Chemicals' margins, necessitating a price increase for 2-EHA to maintain profitability. However, this decision by OQ Chemicals will undoubtedly have ripple effects throughout the industry. Companies that rely on 2-EHA for their products, such as plasticizers, coatings, and lubricants, will need to adjust their pricing strategies to account for the increased costs. This could potentially lead to higher prices for downstream products and services, impacting consumers across various sectors.

As per ChemAnalyst, it's important to note that the price increase for 2-EHA is not just a short-term phenomenon. The November 2023 increase is likely to extend into December and potentially beyond, reflecting the ongoing supply-demand imbalance and raw material cost pressures.