Introduction: This week, the domestic 2-EH (2-ethylhexanol) market center of gravity gradually declined. To attract buying interest for restocking, the price decline accelerated in the second half of the week. By Thursday, Shandong ex-factory prices had dropped to 8,900 yuan/ton, a decrease of 600 yuan/ton from last Thursday’s closing price. Profit margins for 2-EH producers have narrowed significantly, and market sentiment remains lukewarm with unstable trading activity.
This week, geopolitical tensions in the Middle East eased, leading to increased risk-averse sentiment in the market. Consequently, international crude oil and propylene prices fell simultaneously. Overall market sentiment regarding 2-EH turned pessimistic, and end-user procurement enthusiasm cooled sharply. Downstream plasticizer manufacturers maintained moderate production loads but showed weak willingness to restock raw materials. Currently, domestic supply of 2-EH is relatively ample, resulting in a loose supply-demand balance. Additionally, with the Mid-Autumn Festival approaching, pre-holiday stockpiling demand from end-users was limited, further widening the potential downside for the market. Trading activity remained flat overall; traders and downstream buyers primarily adopted a "buy-as-needed" small-order strategy without concentrated restocking, keeping the transaction atmosphere tepid.
Supply conditions for 2-EH remained largely unchanged this week, with industry operating rates hovering around 72%, a slight decrease from the previous week. On the downstream side, plasticizer plant utilization rates improved slightly: DOP (Dioctyl Phthalate) operating rates rose by 1 percentage point to 55%, while DOTP (Dioctyl Terephthalate) rates increased by 2 percentage points to 61%. Operating rates for 2-ethylhexyl acrylate plants remained stable. Although fundamental demand for 2-EH increased slightly, reducing the theoretical supply-demand gap by 0.18 ten-thousand tons compared to last week, actual spot purchases by domestic downstream users were limited due to poor market sentiment and the ongoing downward price trend. International customers also adopted a wait-and-see approach regarding new orders.
Propylene prices rebounded slightly after hitting low levels. Current 2-EH profit margins stand at approximately 200 yuan/ton, causing cost pressures to emerge for some producers. With international crude oil prices fluctuating widely amid significant uncertainty and propylene prices remaining volatile at high levels, the room for price concessions by 2-EH producers has gradually narrowed.
In summary, most domestic 2-EH plants are expected to maintain normal production prior to the National Day holiday, ensuring that overall market supply remains ample. While downstream users anticipate some pre-holiday restocking, purchases will likely be moderate. Buyer intentions are concentrated at the lower end of quoted prices, with insufficient follow-through on higher-priced transactions, providing limited support to the market. It is projected that 2-EH prices will continue to consolidate at low levels before the National Day holiday, with short-term trends characterized by weak fluctuations. In the near future, market participants should closely monitor volatility in international crude oil and propylene prices, as changes in the cost structure may further influence market sentiment. Attention should also be paid to order inflows for downstream plasticizers and their operating rates during the National Day holiday period.
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