Stearic Acid Prices Soar in India on Tight Feedstock Supply

The stearic acid price trend in India took an abrupt turn in the start of August and continued rising unabated throughout the September and the running October month. The sharply rising stearic acid price in the August third-week was recorded to be USD 1209 per tonne after registering a growth of 45% from the July prices. On gaining further hike the price of stearic acid in the September third-week stood at USD 1341 per tonne which further leaped high to a value of USD 1533 per tonne in the October third-week.

The stearic acid prices triggered off following the inexorably spiralling palm oil feedstock prices in the past few months on the back of acute shortage of palm oil supplies to the downstream sectors. The palm oil feedstocks in India are primarily imported from Indonesia and Malaysia, which account for over 84% of the total global palm oil production. Since palm oil is produced from the fruits of oil palm trees, its production hugely depends on weather conditions and other farming-related factors. The low palm oil supply in India’s downstream sectors surfaced due to the adverse climatic conditions as well as the frantically ramping up of palm oil volumes by the largest importing country, China, to ease out its protracted supply deficit after Golden Week holidays.

Stearic acid is a C18 saturated fatty acid, predominantly produced from the hydrogenation of palm oil. Stearic acid is used to form emulsifiers, ointments, lubricants, emollients, that find applications in personal care products, soaps and surfactants, rubber processing, paints and coatings, textiles, and chemical intermediates. The personal care products and cleaning agents are the major drivers of the growing stearic acid market.

As per ChemAnalyst, the demand for stearic acid is expected to stay firm amid the climbing festive sales in India which is going to keep high pressure on the price trends. The fourth quarter is expected to be marked by escalating trends in stearic acid prices due to scarcity of palm oil, intensified China consumption and robust Indian downstream market.