European 2-EHA Prices Rebound in November on the Back of Strong Automotive Demand
- 28-Nov-2023 12:21 PM
- Journalist: Francis Stokes
The European 2-Ethyl Hexanoic Acid (2-EHA) market found itself in a decent position compelled by the economic upturns in November 2023. After witnessing the prolonged dullness due to the rollover demand for 2-EHA in the European market, the prices have rebounded, mirroring the ongoing excellent performance from the downstream automotive industry in the previous segment. This upturn, a reflection of market conditions, persisted throughout November, creating a positive trading atmosphere for 2-EHA suppliers and manufacturers alike.
As per the recent assessment, the market shift in 2-EHA alarmed several European traders as the prices admitted a decent rebound after experiencing prolonged flatness in the market. Throughout November 2023, the prices of 2-EHA in Hamburg, Germany, on a FOB basis, will hike by 2.4% amidst rising demand from the downstream automotive sector. On the demand side, the downstream construction sector in Germany and the exporting nations, including the USA, has begun to perform well. European countries like Germany have experienced a healthy number of sales of automobiles during this timeframe as the demand for used cars witnessed a notable rebound with the increases in their Sales-Volume Index (SVI), along with many markets achieving impressive double-digit growth signaling a revival in the automotive sector. The German car market remains robust despite a slight slowdown in recent months. In October 2023, as per the market reports, new car registrations increased by 4.8% to 217,904, marking the eighth consecutive month of growth. This positive momentum translated into an increased demand for 2-EHA, particularly in Germany, effectively dispelling concerns of a potential market slowdown. Henceforth, to muddle through with the demands of the 2-EHA from the downstream construction and automotive industries, price adjustments have been made by the market players to remain profitable with the current positive trend.
Regarding monetary factors, Germany's economic decline appears to be slowing down, as manufacturing and services activity experienced a less severe contraction in November than in the previous months. However, inflationary pressures remain persistent in the services sector, indicating that consumer prices are unlikely to decline substantially.
As per ChemAnalyst, December is a month where several enterprises are foreseen to destock 2-EHA to avoid tax repercussions, which may lead to prices falling within this timeframe. Additionally, the European Central Bank (ECB) has kept interest rates the same, worried about a possible recession in the Eurozone. These high-interest rates could have hurt demand from industries that use various commodities, such as 2-EHA, during this time despite the European downstream automotive industry brightening in the previous month.