Global LABSA Market Fluctuates, Europe and US Scuffles with High Feedstock Prices
Global LABSA Market Fluctuates, Europe and US Scuffles with High Feedstock Prices

Global LABSA Market Fluctuates, Europe and US Scuffles with High Feedstock Prices

  • 08-Feb-2024 4:58 PM
  • Journalist: Rene Swann

In the first week of February 2024, the global Linear Alkyl Benzene Sulfonic Acid (LABSA) market portrayed a complex landscape shaped by regional disruptions and resilience. Challenges in the U.S. petrochemical industry, stability in Saudi Arabia amid security concerns, intricate dynamics in China influenced by global trade disturbances and the Red Sea crisis, and a nuanced European market collectively highlighted the complex nature of the LABSA industry.

In the United States, freezing temperatures caused disruptions in the petrochemical industry, leading to a constrained supply of upstream Benzene and subsequent shutdowns or reduced rates at major facilities. This upheaval resulted in a 1% increase in LABSA prices, closely tied to the elevated cost of feedstock LAB. Despite stable domestic demand driven by persistent low temperatures, LABSA supply remained consistent during this period.

Saudi Arabia, on the other hand, witnessed a stable LABSA market in the initial week of February. With moderate demand and a steady supply, the pricing environment remained balanced, following a marginal increase in LABSA prices in the previous month due to higher feedstock Benzene prices.

In China, the LABSA market-maintained stability over two consecutive weeks, with a narrow gap between demand and supply and stable feedstock Benzene prices. However, a monthly analysis unveiled a 3% increase in LABSA prices, influenced by concurrent rises in LAB feedstock and upstream Benzene prices by 1.3% and 3%, respectively. The elevated prices of LAB and Benzene contributed to an overall uptick in LABSA production costs. The ongoing Red Sea crisis further aggravated challenges in China, leading to escalating freight charges and shipping delays. Despite these hurdles, LABSA demand in China remained stable, while the supply was characterized as low to moderate, underscoring the intricate interplay of various factors influencing the market landscape.

In Europe, January 2024 witnessed an upswing in LABSA prices attributed to higher feedstock LAB and upstream Benzene prices. Despite these cost pressures, the downstream surfactant industry maintained stable demand. The Red Sea crisis also impacted European trade dynamics, resulting in extended travel times and increased costs. Although manufacturing activities in the Eurozone showed signs of improvement, with the slowest rate of decline since August 2023, Euro Area business activity remained below the threshold limit. Notably, new business inflows decreased at the smallest rate in seven months, contributing to the stabilization of Eurozone employment. However, both output prices and input costs rose at their fastest rates in eight months, reflecting the nuanced challenges faced by the European LABSA market.

According to ChemAnalyst, the upcoming week is expected to see a rise in LABSA prices. This increase can be attributed to the upward trend in the prices of feedstock LAB and upstream Benzene, may drive by volatility in Crude Oil and its derivatives. The heightened costs of these key components are anticipated to raise the production cost of LABSA. Additionally, the approaching Chinese New Year is likely to impact the supply of LABSA, as many manufacturing facilities, particularly in the petrochemical industry, tend to shut down or operate at reduced capacity during the holiday period. This could lead to a temporary decrease in the production of chemical commodities. To address potential disruptions, manufacturers and businesses typically ramp up production levels ahead of the Chinese New Year, creating a surge in demand for raw materials, including LABSA. This increased demand is expected to influence prices as suppliers adjust to meet the elevated market needs.

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