Rising Fatty Alcohol Prices Amid European Manufacturing Slump and Supply Concerns in Late Q2 2024
Rising Fatty Alcohol Prices Amid European Manufacturing Slump and Supply Concerns in Late Q2 2024

Rising Fatty Alcohol Prices Amid European Manufacturing Slump and Supply Concerns in Late Q2 2024

  • 24-Jun-2024 2:39 PM
  • Journalist: Li Hua

Hamburg (Germany): For the past few weeks, prices of Fatty Alcohol have been consistently rising in the European market. Reductions in manufacturing across nations have exacerbated supply-side concerns for Fatty Alcohol manufacturers. According to market sources, Germany's economic growth encountered a setback in June 2024, primarily due to underperformance in its manufacturing sector. The composite Purchasing Managers' Index (PMI) declined in May, indicating a slowdown in overall economic activity, with the PMI just above the threshold of 50, which separates expansion from contraction. Additionally, the rise in freight charges amidst the container crunch has further pressured the price realizations of upstream raw materials required for Fatty Alcohol production.

The ChemAnalyst database shows that Fatty Alcohol prices increased by USD 50 per ton by the week ending June 21st compared to prices at the start of the month in Germany. Germany's economic slowdown impacts the stability of the euro zone, with persistent inflation in services posing a challenge for the European Central Bank (ECB). Rising input and sales prices complicate the ECB's strategy. This cascade of factors has significantly affected industries like chemicals, including Fatty Alcohol, due to increased production costs and potentially reduced demand.

In India, the Asian Palm Oil Alliance (APOA), a non-profit organization representing upstream palm oil-consuming countries, has voiced concerns over Hindustan Unilever Ltd.'s (HUL) plan to reduce the amount of palm oil in its soaps and related products by 25%. Atul Chaturvedi, chairman of APOA, addressed a letter to Rohit Jawa, HUL's CEO and managing director, warning that this decision could undermine global efforts to support the livelihoods of numerous palm oil producers, particularly smallholders. Chaturvedi acknowledged the rise in palm oil prices due to increased input costs but argued that targeting palm oil for criticism is unjustified, as its prices are determined by supply and demand dynamics, much like other edible oils such as soya and sunflower. This situation parallels the market for Fatty Alcohol, where increases in input costs similarly impact prices. Just as in the palm oil sector, changes in demand and supply can affect Fatty Alcohol prices, influencing decisions by manufacturers and potentially affecting the livelihoods of those involved in its production.

According to ChemAnalyst's pricing intelligence, Fatty Alcohol prices are expected to remain buoyant across the regional market. In Asian countries, the Fatty Alcohol market is likely to accelerate due to rising inquiries from the Personal Care industries and increasing upstream costs. Meanwhile, in Europe, the rise in Fatty Alcohol prices is expected to be mainly driven by limited supplies amidst reduced manufacturing and bullish upstream costs.

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