US LAB Price Decline Amidst Lowering Feedstock Costs and Slow Demand
US LAB Price Decline Amidst Lowering Feedstock Costs and Slow Demand

US LAB Price Decline Amidst Lowering Feedstock Costs and Slow Demand

  • 18-Oct-2023 5:13 PM
  • Journalist: Patricia Jose Perez

The global Linear Alkyl Benzene (LAB) market experienced moderate to low price trend during the first half of October 2023. In the United States, the LAB market initially remained steady during the first week but subsequently declined in the second week of the month. This decline was mainly attributed to the decreasing costs of the feedstock Benzene and consistent demand from downstream industries, particularly the Linear Alkyl Benzene Sulphonic Acid (LABSA) and surfactants sectors. Similarly, the Asian market displayed a mixed pattern, with prices falling in China by the end of the first half of October, while the Indian LAB market remained strong due to the ongoing festival season. The overall market trends were influenced by factors such as ongoing inflation, geopolitical tensions, and elevated interest rates, all of which affected consumer purchasing sentiment.

In the USA, the LAB prices saw a 1% decline by mid-October, primarily due to the decreasing costs of feedstock Benzene, along with lackluster demand from the domestic market and high inventories impacting price trends. Demand from overseas markets in Europe and Asia, particularly China, was sluggish due to economic slowdown and persistent inflation in those regions. Furthermore, high US interest rates, expected to remain elevated in the near term, negatively impacted domestic demand. However, the rising Crude oil prices may increase the product costs in the coming weeks.

The Asian market also witnessed a drop in LAB prices during this period, especially in China, where the domestic market faced reduced demand from the downstream surfactant industry. Falling feedstock Benzene prices influenced this downward trend, with the Chinese LAB FOB Nanjing price declining by 3%. As per market sources, the recent holiday season in China temporarily limited procurements, but traders are cautiously optimistic about improving procurement activities in the coming weeks. In contrast, the Indian market experienced an increase in LAB prices due to higher demand from the downstream surfactant industry with approaching festival seasons in October and November.

According to ChemAnalyst, the LAB price might be moderate to high in the global market in the coming weeks due to expectations of rising Benzene prices and steady demand from downstream industries. However, Chinese LAB prices are anticipated to remain depressed in the latter part of October due to abundant inventories and weak domestic demand. Furthermore, global LAB prices are anticipated to elevated through the end of the year. This is primarily attributed to the rising value of upstream Crude oil, which is a consequence of production cuts announced by Saudi Arabia. These production cuts have also raised concerns among producers, and this pressure on production costs may become a key factor driving the sustained high prices of the product.

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