2-Ethyl Hexanol Prices Slump in the US Amid Weak Demand and Lower Production Costs
- 20-Sep-2023 1:58 PM
- Journalist: Stella Fernandes
The 2-Ethyl Hexanol market in the US market experienced a significant decline in August 2023 under the influence of dwindling demand from key end-user sectors, including Paint and Coatings, Adhesives, and Industrial Chemicals. Moreover, a noticeable decrease in the cost price of 2-Ethyl Hexanol due to the falling prices of its feedstock propylene in the US market further supported the downtrend.
In the USA, the 2-Ethyl Hexanol prices witnessed a downturn to settle at USD 1977/MT FOB Louisiana during August 2023 amid low demand from the domestic and international markets. 2-Ethyl Hexanol is a versatile chemical used in various industries, including Paint and Coatings, Adhesives, and Industrial Chemicals. However, the demand for 2-Ethyl Hexanol is cyclical and closely tied to the overall state of the economy. Due to the economic downturns during August, businesses typically reduced their spending on non-essential items, such as new construction and renovation projects. This has led to a significant decline in demand for 2-Ethyl Hexanol from the Paint and Coatings and Adhesives industries.
In addition, the price of 2-Ethyl Hexanol was determined by various factors, including the prices of its feedstock propylene. During August, the cost of propylene also decreased, which led to a decline in the cost price of 2-Ethyl Hexanol. Producers of 2-Ethyl Hexanol faced lower margins and profits due to the lower market price of the chemical. However, a few market players also reduced their costs by taking advantage of the lower prices of their feedstocks.
However, as per the market reports, Dow Chemical in Freeport, Texas, in the US, has put their feedstock Propylene plant on unplanned shutdown, having a capacity of 750,000 MT/year from 31st August 2023. The unexpected plant shutdown of the feedstock might hamper the availability during September to produce 2-Ethyl Hexanol in the US market. However, the reason for the unplanned shutdown is still not revealed, while its impact on the US market is expected to be showcased in the near term.
As per ChemAnalyst, the convergence of these two factors, encompassing weakened end-user demand and the cost-saving benefits of reduced feedstock costs, has led to the recent decline in the 2-Ethyl Hexanol market in the USA. Therefore, any changes in these economic or market conditions can significantly impact the 2-Ethyl Hexanol market. However, the prices for 2- Ethyl Hexanol are foreseen to rebound during September 2023 under the influence of supply tightness in the US market.