In the first half of March 2025, the US 2-Ethylhexanol (2-EH) market experienced contrasting trends, with export prices rising while import prices declined. Domestic prices increased due to higher production costs passed on to buyers, whereas imports from Asia were influenced by lower freight rates and destocking by Taiwanese suppliers after the Lunar New Year.

Demand for 2-EH from the paints and coatings sector remained below expectations entering March 2025, particularly in the construction and automotive industries. However, suppliers restocked in anticipation of increased demand during the spring season.

Production costs of 2-EH varied based on supply sources. Asian suppliers benefited from lower feedstock Propylene (Chemical Grade) prices, while US producers faced higher costs due to a 6% rise in Propylene (Refinery Grade) prices. During this period, US suppliers showed reluctance to negotiate prices, and demand conditions improved, suggesting that prices had likely bottomed out.

Import prices of 2-EH declined as freight charges fell by 11% from Far East to US East Coast. Additionally, Taiwanese plants, including Formosa Chemicals and Nan Ya Plastics, resumed production in late February, increasing supply to the US market. The price of feedstock Propylene (Chemical Grade) fell by 0.6%, while PDH operating rates improved to 72.19%, boosting overall availability. The increased supply, combined with lower transportation costs following Winter Storm Enzo, contributed to the downward trend in import prices.

Meanwhile, domestic supply remained tight as higher Propylene (Refinery Grade) prices drove up production costs accompanied by US suppliers unwilling to trade at lower prices and maintaining strict pricing policy. According to EIA data, US refinery run rates averaged 84% in February, leading to reduced 2-EH output and constrained availability of domestic material.

Within the broader oxo-alcohol market, demand for 2-EH showed stronger growth compared to n-Butanol and Iso-Butanol. Suppliers turned to the spot market to replenish stocks ahead of the spring season, which typically sees increased demand from plasticizers and the automotive industry. Demand in these sectors usually peaks between mid-March and early May, providing support for export prices of 2-EH, accompanied by lower inventories across the warehouses.

Overall demand remained weak, weighed down by sluggish construction activity. US Census Bureau data showed construction spending and housing starts declined by 10% and 0.2% in January and February, respectively. However, the automotive sector provided some relief, with US vehicle sales rising 3.2% in February to 16.0 million annualized units but remaining below expectations.

By mid-March, export prices of 2-EH had increased by 6%, while import prices declined by 7.3%. Looking ahead, prices of 2-EH are expected to remain firm due to higher production costs driven by rising Propylene (Refinery Grade) prices and an anticipated seasonal boost in demand from the homebuilding and driving seasons. However, import prices may face additional pressure from proposed US tariffs in the coming weeks.