Imminent production cuts likely to cause a spike in China 2-Ethyl Hexanoic Acid Prices

Post official announcement of production cuts from steel industry in China, Chemical industries has also started raising their concerns over production cuts of chemical intermediates. As per ChemAnalyst sources, anticipated production cuts raw materials for 2-Ethyl Hexanoic Acid are going to affect availability of the product from the mid of January. However, there are several reasons behind these predicted shortage like pollution control measures for winter Olympics and rising lockdown restrictions.

As winter Olympics hosted by China is near, Chinese government’s yearning to show clear blue sky has been mandating producers to practice production cuts in order to reduce emission. Several chemical intermediate manufacturers are already practicing these production cuts while others are going to do the same. Furthermore, rising Omicron cases in China is also a major concern for key players as they are cautious about China’s zero tolerance policy which may widen the control measures to curb on infection rate. However, several cities like Xi’an and Tianjin are already under lockdown restrictions which also hampered any production linked activities across that place.

Previous 2-Ethyl Hexanoic Acid pricing trend was heading towards bottom due to lower offtakes from the domestic construction sector. However, anticipated shortage is likely to induce firmness in 2-Ethyl Hexanoic Acid prices, which may last for significantly longer period.

As per ChemAnalyst Analysis, 2-Ethyl hexanoic Acid prices are expected to remain firm in forthcoming weeks of January on the back of abovementioned reasons. Furthermore, Chinese lunar holidays or Spring festival in February will also contribute to further supply cuts from China for several commodities including 2-Ethyl Hexanoic Acid and might inject more buoyancy to the prices. Consequently, other Asian market may also get influenced by these market movement of China.