Deteriorating Upstream Values, Reduce Linear Alpha Olefins Prices in USA and Germany

Recent ChemAnalyst data shows that the prices of Linear Alpha Olefins (LAO) have declined in the US market for the month of May and June 2022. As per the analysis, under the influence of modest demand from the domestic market amidst stable supplies, the US market has witnessed a consistent fall for two months.

As per the ChemAnalyst data, a decline of around 3.5% has been observed for Linear Alpha Olefins (LAO) in the German market by the mid of June, owing to ample product availability for the product amidst declined upstream prices. As per the market sources, demand fundamentals for the product have maintained overall stability in the domestic market, while the recent deterioration of upstream value has an opportunity for producers to revise their product price for the domestic market.

On the other side, US players have also experienced the same sentiments in the meantime, as producers felt the same cost pressure as Germany. ChemAnalyst data shows a decline of around 4.8% to 5% for C10, C20, C12-C14, and C16-18 blends in the USA by the mid of June 2022. The prime factor that has influenced this pricing dynamics was reduced raw material cost amidst slow offtakes from the domestic market.

Previously, the US-based key players were threatened by huge inflationary pressure, which later being tried to cool down by the government. The US government has recently announced a hike in lending rate or rate of interest on future loans, which is an initiative to cool down huge inflationary pressure. However, this decision has turned into the threat of recession which may hit the US market in the near term. As per the market experts, they are anxious about the future market dynamics of the USA, as the current market sentiments are pointing towards a recession.