For the Quarter Ending September 2023
The AES (Alkyl Ether Sulphate) market in the USA recovered in the third quarter of 2023 due to increased demand from downstream businesses. Sellers raised prices in July due to low inventory and high demand. The domestic supply of AES has been low because businesses have been operating at lower rates due to excess inventory. The prime reason for the increment in the prices of AES was attributed to a shortage of the feedstock ethylene oxide. This shortage is due to a force majeure declaration at Dow Chemical's ethylene oxide plant in Plaquemine, Louisiana, which caught fire on July 15, 2023. Following August, the prices of the feedstock Ethylene Oxide increased, contributing to the elevated AES production costs. Furthermore, as per FRED Economic Data, the Producer Price Index (PPI) increased by 2% in the USA during August from the previous month has further supported the uptrend during September. Moreover, towards the end of September 2023, demand from the downstream industry started to strengthen as abnormal precipitation patterns led to recordings across North America.
The AES (Alkyl Ether Sulphate) market in India remained at a high level during the third quarter of 2023, compared to the second quarter. This was due to improved inquiries from the downstream surfactant industry throughout the quarter. In July, the price of AES in India showed a significant upward trend, which was attributed to the rising cost of the base material, ethylene oxide, and the increase in demand. Additionally, the downstream surfactant industry saw an increased volume of inquiries during the same period, which further contributed to the market dynamics. A similar trend was observed in the Indian market in August, as the price of the upstream product, palm oil, also showed an upward trend. This further contributed to the surge in AES prices during August.
Following the previous market sentiments, the escalation in feedstock prices led to a surge in production costs for traders. Over time, the demand for AES from the downstream surfactant industry has been high in the domestic market due to the upcoming festival season. This, combined with the increase in feedstock fatty alcohol and upstream palm oil prices, led to a price hike in AES during September.
The AES (Alkyl Ether Sulphate) market in Europe experienced mixed trends in the third quarter of 2023. Prices declined in July due to lower demand from the downstream surfactant industry including detergents, shampoos, and personal care products. As per the data, the market sentiments were influenced by Germany's economic recession, leading consumers to be cautious about making significant purchases, resulting in only essential need-based purchases being made during this timeframe. However, prices gradually increased in August as economic conditions improved and trading activities across the Eurozone picked up. Additionally, the prices of feedstocks benzene and sulfuric acid also increased due to higher demand from the domestic market in September. The increment in the upstream Naphtha and Crude oil prices has led to increased production costs for the product, thus supporting the price trend in Germany. The persistent inflation and high interest rates in the European region have caused an impact on the production costs which has further compelled the producers to raise the price of AES during this timeframe.
For the Quarter Ending June 2023
During the second quarter of the year, Alkyl Ether Sulphate prices experienced a bearish market trend. This decline in prices can be attributed to subdued demand from the downstream surfactant industry and ample inventories in the US market. Moreover, the feedstock prices of Ethylene Oxide and Fatty alcohol also followed a downward trajectory, further influencing the Alkyl Ether Sulphate market trend during this quarter. The decrease in the price realization of Ethylene oxide in the domestic market can be attributed to various macroeconomic factors, including restrictive interest rates and tightening credit conditions resulting from regional banking turmoil. Additionally, the upstream Palm oil prices also witnessed a decline, mainly due to temporary export restrictions imposed on exporting countries, particularly Indonesia. These restrictions directly impacted the supply of cooking oil within the country, contributing to the overall situation. Furthermore, according to the US Bureau of Labor Statistics;, the manufacturing PMI index showed a declining trend, reaching 321.064 in May, and 309.771 in June. These figures indicate a contraction in the manufacturing sector in the US.
During the second quarter of the year (Q2), the Alkyl Ether Sulphate market in the Asia-Pacific region experienced a downward trend. This decline in price can be attributed to lackluster demand from the downstream surfactant industry, coupled with an abundant supply of the product in the market, leading to a slump in its cost in South Korea. Additionally, the reduced prices of feedstock Ethylene oxide and Fatty alcohol also contributed to the ease in SLES prices. This change was a consequence of economic slowdown, inflationary pressure, and rising interest rates, which have dampened consumer purchasing activities. Moreover, upstream Palm oil prices experienced a decline in Malaysia during Q2, as production rates increased significantly with substantial trading activities. This decline in Palm oil prices had a further impact on the cost of Alkyl Ether Sulphate. Furthermore, the reduced demand from the Chinese market also influenced the overall price decline across the Asia-Pacific region, as consumers in the region were making need-based purchases.
Alkyl Ether Sulphate experienced mixed sentiments in the European market during the second quarter of 2023. The price fluctuations of its feedstock, Ethylene, and Fatty Alcohol, followed a similar trend during this period, with an initial increase and a subsequent decline by the end of the quarter. The demand from the downstream surfactant industry in the region remained stable to weak. The cost of Alkyl Ether Sulphate declined by the end of the quarter, primarily due to weak cost support from upstream Palm oil. However, European businesses faced challenges posed by inflation and higher interest rates, which resulted in a slowdown in consumer spending and heightened unemployment fears. These market uncertainties contributed to the gloomy demand from the downstream surfactant industry. Despite a slight reduction in the annual inflation rate in the Euro area from 6.1% in May 2023 to 5.5% in June 2023, as reported by Eurostat, the statistical office of the European Union, the inflation rates remained relatively high. Consequently, consumers remained hesitant in their purchasing decisions. Overall, the European market for Alkyl Ether Sulphate encountered a complex set of factors during the second quarter, influencing both its pricing and demand dynamics.
The North American market faced challenges during Q1 2023, primarily due to prolonged stagnancy in market activities and rising inflation. Throughout the quarter, the Alkyl Ether Sulfate (AES) market experienced fluctuations, and regular price revisions were observed due to changing market supplies amidst slowly improving demand with the arrival of the summer season. As per the data, the downstream personal care products market showed overall stable demand for the product, and traders were optimistic about future demand for the product as summer approached. However, during the month of March, the collapse of two major banks in the USA also contributed to dullness in market activities.
Asian market remained lackluster in demand for Alkyl Ether Sulfates during the first quarter of 2023, where multiple price revisions were observed. As per the data, the price of Alkyl Ether Sulphate (AES) in India fell during the final month of the quarter by 1.7%, despite the expected seasonal demand upswing. The Asian market was bearish, with a moderate supply of the product and low demand in the regional market. The availability of ample products and cheaper imports have contributed to the price trend. The banking crisis in the USA also impacted global economic activities, further lowering demand for AES. As a result, the prices of AES in Asia continued to follow a downward trend during the second half of the quarter, with no significant changes in relevant factors impacting the final prices.
The European market has been competing with high inflation and sluggish economic activities, which have been causing major economies such as the UK to edge closer to a recession. During the quarter, the demand for AES was low to moderate, and multiple price revisions was noted due to factors such as imports and falling freight charges at major trade routes. However, the ongoing winter season played a crucial role in low demand from the domestic personal care products market, which later instilled an optimistic outlook in the market towards the end of the quarter. Further, the demand fundamentals for the product started improving by the end of the quarter, as traders started procuring for arriving summer season in the region.