2-EHA Prices Experience Downtrend in US and Germany Amid Low Demand and Cheap Imports
- 25-Aug-2023 3:25 PM
- Journalist: Harold Finch
The US 2-EHA (2- Ethyl Hexanoic Acid) market experienced a weekly downtrend during the H1 of August 2023 amid a cheaper import from the German market. On the contrary, despite the unplanned shutdown of feedstock 2- Ethyl Hexanol, the Taiwanese 2-EHA market remained unchanged owing to enough supplies from the Japanese market to cater to the Asian demand during this timeframe.
Despite the improvement in economic activities in the USA during this period, the2-EHA market remained subdued amid contemptible imports from Germany to settle at 2604 USD/tonne CFR New York (USA) during mid-August 2023. The price of 2-EHA in the US is closely linked to the prices of imported cargoes from key exporting countries like Germany. Therefore, the muted demand from the downstream automotive industry in Europe declined the overall 2-EHA market of Europe. Hence, to remain competitive and sustain their offtakes in the market, the European traders exported their cargo to the USA at lower prices, which supported the bearish trend. However, as per Fred Economic data, total vehicle sales in the US increased from 16.195 (June) to 16.318 (July), which might surge the demand for 2-EHA from the downstream paints and coating industry during the end of August. Moreover, the lower upstream propylene prices further supported the bearish trend.
Likewise, a weekly downtrend has been experienced by 2-EHA in Germany due to weaker-than-expected demand from the downstream automotive sector in Europe. The automotive industry is a major consumer of 2-EHA, and as per the data, the sales volumes till July declined by -13.2%, which is a major loss. Hence, to stay afloat in the competitive marketplace, the European traders adapted to the ever-changing needs and decreased their posted product prices, which further supported the bearish trend to settle at 2498 USD/tonne 2-EHA FOB Hamburg (Germany) during the projected period.
On the contrary, the 2-EHA in the Asian market sustained an overall stable trend for weeks due to steady demand and supply gap from Japan catering to the liquidity in the market. Despite the unplanned shutdown of feedstock 2-Ethyl Hexanol at Nan Ya Plastics in Mailiao, Taiwan, having a capacity of 220,000 mt/year, the 2-EHA prices in Taiwan remain unaffected due to the pessimistic approach of traders as they were cautious about their inventory levels and are working to keep them at optimal levels.
As per ChemAnalyst, the US 2-EHA market is anticipated to experience a marginal rise during the H2 of August 2023 under the influence of expected new inquiries from the domestic market. Likewise, the German 2-EHA market players might surge their offered quotations to cope with the import demand dynamics in the near term, while the Asian market is still unpredictable.