The Global Fatty Acid market leaning down in April
The Global Fatty Acid market leaning down in April

The Global Fatty Acid market leaning down in April

  • 20-Apr-2022 3:25 PM
  • Journalist: Robert Hume

The global Fatty Acid market, which witnessed its record height in the previous months, has been rallying downwards since early April. Despite the strong feedstock Palm Oil market, this downhill price trajectory caught the surfactant players off guard. The demand for downstream cleaning agents and cosmetics has remained relatively low worldwide.

Fatty Acid prices are now sliding, leaving no space for negotiation in the overseas market. Accordingly, trade and shipping volumes are continuing to decline weekly. The persistent energy crisis in North America worsened with the unprecedented heavy snowstorm. Eighteen states are under impact by blizzards, thunderstorms, and tornadoes. The region's power outages and transportation constraints have affected both the manufacturers and consumers. The supply side's positive support also dwindled when most facilities were shut as the storm knocked out power.

The third-largest exporter of Fatty Acids, China, has a very different scenario. The country has been battling the worst Covid outbreak since the pandemic. As part of the zero-tolerance policy, the government implemented full and partial lockdowns in numerous cities, including the provinces of Jilin, Hebei, Shandong, Guangdong, and Shanghai. China's industries have been shut down or are functioning at a reduced rate because of lockdown limitations imposed to combat the highly infectious Omicron strain. Also, China has kept on strengthening its strategic ties with Russia, and the intensifying conflict has impacted the regional market fundamentals. Spot prices for Fatty Acid C8-C10 on a FOB basis in China fell more than 3% this month, according to the ChemAnalyst database.

As per the ChemAnalyst, "Fatty Acid prices in the global market will ease in the coming weeks. The responsible factors include bad weather, weak consumer buying sentiments, healthy feedstock Palm Oil imports from Indonesia, and declining demand from the downstream detergent players with sufficient inventories. However, the upstream Palm Oil prices will stay buoyant with no signs of decline in the near time."

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