November 2023 Witnesses Downturn in LABSA Prices in the US and Asian Markets Amidst Sluggish Demand
- 21-Nov-2023 2:05 PM
- Journalist: Peter Schmidt
Throughout the first half of November 2023, the global market for Linear Alkyl Benzene Sulphonic Acid (LABSA) witnessed a downturn, which was primarily attributed to a decrease in the price of the key feedstock, Benzene, due to a relaxation in Crude oil prices. Further, the demand for LABSA in the downstream surfactant industry remained subdued during this period. In the US, LABSA prices experienced a decline due to sufficient supply, whereas the Asian market displayed mixed sentiments. Although prices initially remained high in China during the first week, they decreased by the end of the first half of November. Overall, market trends were influenced by decreased feedstock cost, persistent inflation, geopolitical tensions, and heightened interest rates, all of which impacted consumer purchasing behavior.
The US LABSA market experienced a decline primarily attributed to the diminishing costs of feedstock Benzene as the Crude oil prices experienced a downshift amid low demand. The lackluster demand from the domestic market and elevated inventories further influenced the downward trend in prices. Further, the depreciation of another feedstock, Sulphuric Acid, contributed to the overall ease in LABSA prices during this period. Overseas markets in Europe and Asia showed sluggish demand, influenced by the region's economic slowdown and persistent inflation. Moreover, the high interest rates in the United States, anticipated to remain elevated in the near term, harmed domestic demand for LABSA.
During this timeframe, the Asian LABSA market witnessed a comprehensive decline, primarily driven by a reduction in demand from the downstream surfactant market, especially as the Chinese economy experienced a slowdown. Another contributing factor to this decline was the global relaxation in feedstock Benzene prices, influenced by crude oil prices and subdued demand. In the Indian market, purchasing sentiments declined after the festival seasons, and ample supply in the domestic market further supported this trend for LABSA.
According to ChemAnalyst, the price trajectory for LABSA is expected to continue its decline trend through November and December in the global market. This is foreseen due to anticipating a persistently bearish demand for the product from the downstream industry. Additionally, the price trajectory may be influenced by the expectation that feedstock Benzene prices will remain low, contributing to the ease in the production costs of LABSA during this period. Nevertheless, the anticipated rebound of the LABSA market in January 2024 is attributed to the expected reduction in inventories and a potential rise in demand during that period.