LABSA Prices decline in Saudi Arabia, US and China Seem Stabilizing on a Positive Note
LABSA Prices decline in Saudi Arabia, US and China Seem Stabilizing on a Positive Note

LABSA Prices decline in Saudi Arabia, US and China Seem Stabilizing on a Positive Note

  • 13-Mar-2024 6:05 PM
  • Journalist: Robert Hume

The global Linear Alkylbenzene Sulfonic Acid (LABSA) market exhibited diverse trends across key regions during the first week of March 2024. The Saudi Arabian LABSA market observed a price decrease, in line with a 5% decline in feedstock LAB prices within the same timeframe. The reduction in feedstock costs impacted production expenses, contributing to a bearish trend. Product demand remained average, while supply improved due to the normalization of the Red Sea crises, fostering a positive global trading atmosphere. The decline in LABSA prices was attributed to ample product supply, evident in elevated port inventories. The commodity's export faced a downturn due to the lingering impact of the Red Sea crises, contributing to the overall bearish trend.

This week, LABSA prices in China rose by 0.3%, mirroring the concurrent increase in feedstock LAB costs. Heightened trading activities post the Lunar New Year festivals, coupled with new orders, supported this price surge. The preceding month had constrained product supply as production units operated at reduced capacities during Lunar New Year festivities. The overall price increase for LABSA in February reached approximately 1%, correlating with the rise in production costs associated with feedstock. The same period witnessed significant increases in feedstock LAB and upstream Benzene prices by around 1.8% and 11%, respectively. Chinese Lunar New Year festivities contributed to reduced supplies of both Benzene and LABSA, resulting in a notable price surge. Heightened demand for raw materials and chemical commodities before the holiday period, coupled with reduced supply during the festive season, led to a significant market tightening and higher prices for commodities like LABSA.

During the same week, the US market witnessed a marginal increase in LABSA prices, primarily due to a slight uptick in feedstock LAB prices by approximately 0.5%. This increase raised production costs, resulting in a bullish trend. Demand from the downstream surfactant and detergent industry remained moderate, and there was a slight alleviation in the continuous surge of freight rates. However, rates remained above the threshold limit, impacting LABSA prices. The country experienced muted demand and low supply, influenced by persistently high freight rates, ongoing carnival festivals, and adverse weather conditions challenging the petrochemical industry. Shutdowns or reduced operating rates in various plants added upward pressure on LAB and LABSA prices. The substantial 14% increase in upstream Benzene prices during the week played a pivotal role in reinforcing this bullish trend.

ChemAnalyst anticipates a potential increase in the price of LABSA in the second half of March 2024. This projection is based on the expected rise in the price of upstream Benzene during the same period. The anticipated increase in Benzene prices is attributed to the tight supply of Crude Oil in the global market. This tightening is a consequence of additional supply cuts implemented by Russia and OPEC countries.

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