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Glycerin and Stearic Acid prices in China to Shoot Up on Scarce Imports amid the whammy from Malaysian Floods
Glycerin and Stearic Acid prices in China to Shoot Up on Scarce Imports amid the whammy from Malaysian Floods

Glycerin and Stearic Acid prices in China to Shoot Up on Scarce Imports amid the whammy from Malaysian Floods

  • 10-Jan-2022 5:05 PM
  • Journalist: Nina Jiang

The Glycerin and Stearic Acid markets in China are currently experiencing a seasonal winter dullness which has brought stabilization in their prices. The manufacturers are under the process of stock clearance in the running month with the plans in revising the prices after the spring festival in China during February start. The last assessed prices of Glycerine Refined USP 95.9%, Stearic acid stood at US 2255/MT CFR Shanghai, USD 1695/MT EXW Shanghai, respectively. However, the market is soon expected to experience doldrums with bare minimum imports from Malaysia.

Malaysia, which is the second-largest exporter of Glycerine and palm oil feedstock to China, is facing tumult owing to the unforeseen event of extreme downpour and floods across its seven states owing to the landfall by a tropical depression across the eastern coast of the country during the second half of December 2021. The floods in Malaysia have caused the country to enter January with a slump in the productions of palm oil, which is the feedstock for both glycerine and Stearic acid and various other oleochemicals. The tightness in palm oil supplies has straightaway raised their prices by 4% during the first week of January. Consequently, the input cost of the downstream oleochemicals has jumped up in Malaysia and in countries which import these products from Malaysia.

Amid marginal supplies from the glycerine and stearic acid producers, the downstream industries in Malaysia are forced to scrape through the little of whatever inventories are left in order to meet the growing demand in the personal care industry. Furthermore, the spot trading in Malaysia have also lost its charm with limited volumes to trade and that too on exceptionally high prices causing the buyers to turn to its competitor exporting countries instead. China, which imports heavy volumes of glycerine and stearic acid from Malaysia is surrounded by dark clouds amidst the anticipation of the consequence of the recent turn in events.

As per ChemAnalyst, the high dependency of Chinese downstream industries on imports from Malaysia is expected to stay under turbulence with spiralling prices particularly in February after the Spring festival with the looming tightness in the supplies of glycerine and stearic acid. The slowdown in downstream activities during the Chinese festival is also expected to exacerbate the supply glut in the market. Furthermore, the hamper to palm oil productions in Malaysia is likely to take time in recovering to its full strength, giving no hopes of relief in pressure on the domestic and international downstream industries. As the demand from the end-user customers in China are expected to stay jacked up, the traders will have a job catering to the consumer needs during the next month.  

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