Moderate Terminal Demand Stabilizes Fatty Alcohol Prices in Late November 2023

Hamburg, Germany: After demonstrating a bullish run in November 2023, the prices of Fatty Alcohol stabilized in the domestic market of Germany in late November 2023. The inquiries of Fatty Alcohol from the downstream Personal Care industries have remained moderate, limiting the manufacturers for price developments. The European Chemical industry, including Fatty Alcohol, has been grappling with ongoing difficulties due to low global oil prices and sluggish demand. Fluctuating oil prices, driven by factors like OPEC+ production cuts and global economic pressures, significantly affect the performance of the German manufacturing sector.

The ChemAnalyst database has shown that the prices of Fatty ALcohol have demonstrated an increment of USD 40 per ton in the week ending November 24, as compared to the prices observed at the start of this month. Market transactions from the Personal Care industries were mainly based on immediate requirements and consisted of small orders. The delay in the OPEC+ meeting and the divergence of opinions among member countries has prompted downward pressure on the International Crude Oil prices. However, it caused no significant impact on the Fatty Alcohol prices this week as the manufacturers already have enough inventories to cater to the downstream demand coming from the Personal Care sectors. As per the market sources, The economic powerhouse of Europe is confronting substantial declines in new orders and affordability, and these challenges are anticipated to persist into 2024.

Amidst a challenging economic environment, the Netherlands witnessed a significant plunge in its export activities. According to data from Statistics Netherlands, there was a 14.4% year-on-year decrease in exports of various commodities, including Fatty Alcohol, which amounted to EUR 69.65 billion in September 2023. This decline can be attributed to reduced sales to both EU countries which saw a drop of 15.7%, and non-EU nations where sales fell by 12.2%. On the input energy front,  as of November 22, EU gas storage sites were nearly at maximum capacity, standing at 98.4%, owing to the significant inventories, according to Gas Infrastructure Europe's data. Thus, the input energy material was available to supplement the Fatty Alcohol production.

According to the pricing intelligence of ChemAnalayst, the prices of Fatty Alcohol might gain a downward momentum in the German market. Despite the successive drop in inflation levels, the market players are cautious about a turnaround in the procurement volumes of Fatty Alcohol from the downstream Personal Care industries. In addition, the gas inventories are also at their optimum levels, ensuring sufficient stocks catering to the Fatty Alcohol production firms. However, According to the Federal Statistics Office, The annual German Consumer Price Index (CPI) is expected to rise 3.5% in November, down from the 3.8% increase reported in October. The expected drop in the inflationary pressure will contribute to alleviating the strains from the purchasing power of the Fatty Alcohol end-use industries.