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How supply shortage and robust demand influencing the prices of Fatty Alcohol worldwide

How supply shortage and robust demand influencing the prices of Fatty Alcohol worldwide

How supply shortage and robust demand influencing the prices of Fatty Alcohol worldwide

  • 29-Mar-2022 6:24 PM
  • Journalist: Nicholas Seifield

The US fatty alcohol market has been facing significant upward pressure from bullish feedstock Palm Oil prices against supply chain constraints globally. The prices have been rising dramatically in the overseas market since the beginning of the COVID-19 pandemic. As per the ChemAnalyst database, the prices reached at USD 2799/MT for Fatty Alcohol C16-18 DEL Louisiana and USD 2720/MT for Fatty Alcohol C12-15 DEL Louisiana in the week ending 25th March with a month-on-month inclination of roughly about 3% taking support from the downstream Surfactant sector. The increased demand for cleaning agents, like sanitizers, disinfectants, and personal care products like shampoo, conditioner, shower gel, and antiperspirant have been the major driving factors for this uptrend.

Adding to the fire accident at PMC Biogenix Specialty chemicals facility in US’ Memphis, Tennessee site, Fatty Alcohol markets have become tighter with the accelerating geopolitical tension between Ukraine and Russia. Shortage of feedstock Palm oil supplies and limited spot availability from the world's major exporting country, Indonesia, along with the Malaysian import disruption with an increased crackdown from the US Customs and Border Patrol on Malaysian imports from Sime Darby Plantation Berhad has continued to plague the downstream Fatty Alcohol market in the United States. The Malaysian Palm Oil Council (MPOC) considers that the Russia-Ukraine crisis will continue to be the most critical factor influencing palm oil prices.

According to the ChemAnalyst database, Galaxy Surfactants Limited stated that rising feedstock prices, supply concerns, and the volatility in the export markets due to container shortage and increasing freight rates hampered their operations. The resultant worst possible combination has effectively increased operating costs and hindered the capacity to meet underlying demand.

As per ChemAnalyst, "the Fatty Alcohol prices in the international market are expected to stay buoyed throughout H1 of FY2022 with the increasing demand for cleaning agents driven by increased consumer's hygiene maintenance in the summer season."

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