Sodium Lauryl Ether Sulphate (SLES) Prices Upswing in China Amid Critical Raw Material Shortage and Falling US Dollar

The prices of Sodium Lauryl Ether Sulphate which had been reflecting a bearish outlook since December due to the availability of inventories and prevailing stock clearance sentiments ahead of Chinese New Year experienced a sudden surge in the prices in the week ending 21st January. As per the ChemAnalyst chemical database, last Friday prices for SLES 28% and 70% registered an astonishing hike of 17% and 5% respectively, within a week’s time, in the offered contracts owing to the change in market economics with the recent fall in US Dollars.

The demand for Sodium Lauryl Ether Sulphate in the detergent and personal care sector took an abrupt turn on the higher side with a positive market outlook during the upcoming Chinese New Year celebrations as well as Beijing Olympics in February first week. As the available inventories could not keep pace with the hastily rising enquiries, the Sodium Lauryl Ether Sulphate manufacturers rushed on to procure more raw materials in order to enhance their output. However, the prices of raw materials shot up in the spot market owing to their supply shortage and weakening US Dollars.

The shortage of raw materials took support from the strength gaining ethylene and ethylene oxide raw materials futures and continued volatility in palm oil feedstocks in the international market. The feedstock tightness exerted a substantially low operational load on manufacturing facilities causing the output to fall considerably. In addition to the constraints due to the suspension of activities at a majority of the Chinese ports in compliance with China’s zero-covid policy, the procurement of feedstocks has become dangerously difficult owing to their rallying costs with depreciating dollar signal. US Dollars on last Thursday reached a two-month low value of 94.81 with respect to the currencies belonging to six major rivals, on account of tightening monetary policies in the US. Hence, the traders were found translating the strengthening feedstock sentiments into the upward striding Sodium Lauryl Ether Sulphate prices.

According to ChemAnalyst, the prices of Sodium Lauryl Ether Sulphate are expected to stay firm for a short-term as a cap on the prices is foreseen with the permeation of sluggishness in the production and spot market activities during the first half of February. An expected gain in dollar value by then may bring stability in the feedstock market eventually ruling out its scarcity from the downstream markets.