Towards the end of November 2024, the U.S. 2-EH (2-Ethylhexanol) market experienced divergence, with export prices remaining stable at historically low levels, while import prices saw depreciation over the week. The depreciation in 2-EH import prices was largely attributed to expanded capacities across the broader oxo-alcohol market, resulting in price competition within the U.S. market. U.S. suppliers preferred to procure inexpensive imports, particularly from the Chinese market.

Across China, oxo-alcohol production capacity surpassed 1 million tonnes per year, with several new capacities expected to be added later in 2024 and into 2025. According to market insights, domestic producer Satellite Chemical achieved a stable output of 250,000 tonnes per year, while Wanhua Chemicals was conducting test runs on a new 2-EH production unit with an approximate capacity of 400,000 tonnes per year. Domestic 2-EH output capacity in China rose by 500,000 tonnes per year, a 25% increase from October 2024, continuing to influence 2-EH prices across the U.S. market, prompting prices to decline.

In mid-November 2024, some production units were temporarily shut for maintenance. However, their return to production later in the month, particularly with Lihuayi Enterprise resuming operations, resulted in an improvement in the supply of exported 2-EH to the U.S market influencing the decline in prices. Demand conditions from the downstream plasticizer industry remained weak due to a seasonal lull, prompting many Chinese suppliers and manufacturers to liquidate their inventories. Major producers and suppliers, such as Dongmeng Oriental and Qilu Petrochemical, were reported to have revised their 2-EH prices by Yuan 100/MT and Yuan 300/MT, respectively, signaling the liquidation of existing stocks across the Chinese market.

Export volumes of 2-EH surged by approximately 500% in October 2024, further fueling price competition in the U.S. market, with some suppliers opting for attractively priced imported cargoes from China. This weakened any expected support for domestic 2-EH prices in the U.S. market.

Export prices of 2-EH across the U.S. market remained stable, as some improvements in export conditions were reported although packaging delays across Texas continued to result in increment in lead times for deliveries. According to data from the Association of American Railroads, chemical railcar loadings rose to 33,170 for the week ending November 16, up by 3.9%, which contributed to the stability in export prices. U.S. suppliers also confirmed receiving orders from the Turkish market, with some cargoes already headed towards Turkey.

Domestic demand for 2-EH in the U.S. remained sluggish, with downstream plasticizer industries continuing to perform poorly. Although homebuilding confidence improved by 3 percentage points in November 2024, the index remained below 50, signaling a mostly bleak outlook. Housing starts depreciated by approximately 3.1%, according to the National Homebuilders Association, and building permits were down by 0.6%. U.S. suppliers anticipated that demand for 2-EH would not recover until mid-December 2024, and they were under pressure to liquidate inventories. Despite this, many U.S. suppliers kept their prices firm in order to remain profitable, with discussions underway for deliveries scheduled for December 2024.

Toward the end of November, export prices of 2-EH across the US market were assessed at a historical low of USD 1110/MT FOB Texas with no changes from the previous week, meanwhile import prices lost another 1.7% and settled at USD 2190/MT DDP New York as demand conditions from the primary downstream industries like DOP (Dioctyl Phthalate) and 2 -Ethylhexyl Acrylate remained sluggish.

Overall, both export and import prices are expected to depreciate across the U.S. market due to the expansion of oxo-alcohol production in China. Domestic suppliers are also likely to destock existing inventories to avoid tax repercussions associated with holding inventories that could lose value.