Lead: In June, China's 2-ethylhexanol (2-EH) exports reached 50,600 tonnes, the highest monthly volume in nearly two years. This increase effectively alleviated domestic sales pressure. In July, 2-EH exports are expected to decline to around 20,000 tonnes.
I. Significant Increase in China's 2-EH Exports in H1
China's cumulative 2-EH exports from January to June 2026 totaled 179,600 tonnes, an increase of 131,600 tonnes compared to the same period last year, representing a significant export growth. Major destinations included India, Turkey, South Korea, Taiwan (China), and Vietnam. In the first half of the year, exports to these four countries and regions amounted to approximately 142,000 tonnes, accounting for 79% of total exports.
Since the geopolitical conflict between the US and Iran began in March, the blockade of the Strait of Hormuz has disrupted 2-EH shipments from the Middle East, leading to a notable decline in volumes exported from the region to other areas. Supported by high energy prices, 2-EH prices in Europe remained elevated, closing the arbitrage window for exports to Turkey. Additionally, due to rising international crude oil prices, 2-EH plants in Northeast Asia and Southeast Asia faced cost inversion, impacting their operating rates. Meanwhile, China's 2-EH capacity expanded in the first half of the year, providing ample supply to compensate for losses from overseas producers. Under the pressure of domestic supply competition, China's 2-EH prices gradually fell below cost, opening the export arbitrage window. Consequently, China's 2-EH exports saw significant growth from April to June.
II. Q2 Export Growth Compensates for Domestic Demand Losses
In terms of domestic consumption, 2-EH consumption declined in the second quarter. This was primarily driven by the upward price trend, which prompted end-users to actively replenish inventories in March, pulling forward consumption. Entering the second quarter, domestic downstream demand for 2-EH gradually corrected downward, with a noticeable decline in June. Furthermore, as 2-EH prices reached their year-to-date high at the end of March, downstream users became cautious in purchasing to hedge against the risk of falling raw material prices.
In contrast, 2-EH exports increased significantly in the second quarter. China exported 138,500 tonnes of 2-EH in Q2, an increase of 97,400 tonnes from Q1, with June showing particularly strong export growth. Against the backdrop of a domestic surplus in the first half of the year, exports became an important channel for large 2-EH producers to relieve sales and competitive pressures.
III. China's 2-EH Exports Expected to Decline in July
The geopolitical situation between the US and Iran remains unresolved, 2-EH prices in Europe stay at high levels, and supply gaps exist in other parts of Asia. China's 2-EH products continue to hold advantages in terms of supply availability and price. China's 2-EH imports have been significantly compressed, rapidly transforming the country from a net importer to a net exporter. Major export destinations include India, Turkey, and Taiwan (China). The increase in China's 2-EH exports has effectively alleviated domestic competitive pressure.
Compared to the growth rate of 2-EH capacity, domestic consumption growth is sluggish. While exports can relieve sales pressure, achieving a supply-demand balance remains difficult when domestic supply is large. Due to severe cost losses for China's 2-EH in June and July, domestic plants have reduced operating rates to minimize losses. Consequently, 2-EH exports in July are expected to decline to around 20,000 tonnes.
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