For the Quarter Ending March 2023
North America
In early Q1, the pricing dynamics of the Fatty Acid remained at the upper levels in the US market. The downstream purchases from the personal care industries escalated and strengthened market sentiments for Fatty Acids. The release of inventories has enhanced with bullish market sentiments. The production facilities were operating at a regular pace, and there was an adequate supply of goods to meet the downstream demand. However, in March, the price trends of Fatty Acid progressed in a southwards direction. The input energy material costs have been eased and alleviated the pressure on the manufacturing activities. The weak economic conditions brought on by the failure of two banks, Silicon Valley and Signature Bank, have fumed the trade activities in the US market, leading to a downturn in the Fatty Acid market. The ChemAnalyst database has shown that Fatty Acid Stearic Acid Triple Pressed DEL USGC prices were concluded at USD 2020 per ton at the end of the first quarter.
APAC
Throughout the first quarter of 2023, the prices of Fatty Acid has remained under pressure owing to average demand fundamentals. The manufacturing sector has started to strengthen in the domestic region of China after the removal of COVID restrictions. The demand from the downstream personal care industries improved and reinforced the market fundamentals of Fatty Acids in mid-Q1. After the spring festival holidays, the shortage of workforce has led to production cuts across the nation, leading to limited availability of the finished goods in the domestic region. As a result, the prices of Fatty Acid has remained on the higher end. However, the slowdown in demand from the Western market has weakened the exports from China, and the transportation and logistics costs have also settled lower. Consequently, Fatty Acid C8-C10 FOB Shanghai prices were settled at USD 6426 per ton in March.
Europe
In the German market, the prices of Fatty Acid has demonstrated mixed market sentiments in the first quarter of 2023. The demand from the downstream personal care sector has remained muted amid the raging inflationary pressure in early Q1. On the supply side, there was sufficient availability of the finished goods in the domestic region. However, the prices of Fatty Acid improved in the mid-Q1 amid the rising costs of upstream Palm Oil. The exporting country Indonesia has witnessed a rise in upstream Palm Oil costs due to escalating domestic demand and adverse weather conditions. Furthermore, the rising inflationary pressures have continued to impact manufacturing across the nation. Thus, Fatty Acid C8-C10 FOB Hamburg prices averaged at USD 7420 per ton at Q1-end.
For the Quarter Ending December 2022
North America
In the US market, Fatty Acid prices witnessed a volatile trend in Q4. The prices inched higher in October amid rising inflation and firmer raw materials prices. The market players have reported that inquiries from the downstream detergent and personal care industries have increased and led to a positive development in the market growth of Fatty Acid among the manufacturers. Furthermore, the cost pressure from upstream Palm Oil has diminished, and freight charges across the major trade routes have declined sharply. In late Q4, an increase in procurement from the downstream personal care and other end-use industries accelerated the demand dynamics of Fatty Acid in the domestic region. Fatty Acid Stearic Acid Triple Pressed DEL USGC prices were observed to be hovering around USD 1765 per ton at the quarter end.
APAC
In the fourth quarter of 2022, the prices of Fatty Acid have demonstrated a volatile trajectory. Spot inventories were at higher levels due to the relatively low demand from the downstream food and personal care industries. Manufacturers have decreased their offers to maintain supply-demand equilibrium because of growing supply pressure. In addition, the weaker ringgit in one of the major Palm Oil producing nations, Malaysia, has made upstream Palm Oil cheaper for importing countries. Furthermore, due to supply-chain issues brought on by the resurgence of COVID cases, the prices improved in late Q4. The ChemAnalyst database has shown that Fatty Acid C8-C10 FOB Shanghai prices settled at USD 6915 per ton in December.
Europe
The prices of Fatty Acids edged higher at the start of the fourth quarter of 2022 and then dipped, demonstrating mixed market sentiments. The rising cost of energy has weighed on the domestic manufacturing of products. As a result, the manufacturing PMI decreased to 45.7 in October. According to market participants, supply constraints have been eased, and the operating rate of manufacturing units in the domestic region has been consistent. Intensified inflationary pressures and rising interest rates have curtailed the purchasing power of the end-use industries and caused a fall in the Fatty Acid market. However, an improvement in demand in December have reinforced the pricing dynamics of Fatty Acid in the German market. Fatty Acid C8-C10 FOB Hamburg Prices were assessed at USD 7540 per ton in Q4-end.
For the Quarter Ending September 2022
North America
Fatty Acid prices have demonstrated mixed sentiments in the USA market. The prices escalated and fell in the third quarter's latter half. The cost support from input materials was also inadequate as the prices kept oscillating in the regional market. Several disruptions, such as extreme weather in Australia and transportation issues in the USA, have impacted the supply dynamics of Fatty Acid. The adverse developments in the personal care and cosmetics markets have pushed the demand dynamics for upstream Fatty Acids to demonstrate a southward trend in the domestic market in September. However, plateauing inflationary pressures have been observed towards the end of the third quarter. Consequently, Fatty Acid Stearic Acid Triple Pressed DEL USGC prices averaged at USD 1695 in Q3-end.
Asia-Pacific
The prices of Fatty Acids have retained their downward momentum throughout the third quarter of 2022 in China. The Chinese economy battled new covid cases in early Q3 and crippled manufacturing activities. The downstream demand from personal care industries also fell, and the traders were reluctant to clear off their inventories. As a result, a consistent plunge has been observed in the prices offered for Fatty Acids in the domestic region. In addition, the pricing patterns for upstream Palm Oil have been on a downward trend due to overflowing inventories in the manufacturing countries, Indonesia and Malaysia. The slowdown in demand has further compounded the challenges for the market growth of Fatty Acid in the domestic region. Fatty Acid C8-C10 FOB Shanghai prices were settled at USD 7015 per tonne in September.
Europe
In Germany, the decline in new orders from downstream personal care industries has reduced the price offers for Fatty Acids in the first half of the third quarter. The supply turmoil unleashed by Russia's invasion of Ukraine has prolonged global economic challenges that have driven up the energy material costs and caused uncertainty in delivery times and product availability. In September, the downtick in demand from the downstream industries, coupled with escalating values of natural gas, hampered the production capacities of manufacturing firms. The lower offtakes from the terminal market have resulted in high stockpiles in the domestic market of Germany; as a result, the manufacturers have reduced their quotations. Thus, Fatty Acid C8-C10 FOB Hamburg prices concluded at USD 7550 per tonne at the end of the third quarter.
For the Quarter Ending June 2022
North America
In North America, the Fatty Acid prices showcased mixed sentiments throughout the quarter of 2022 on account of slow demand from downstream sectors such as cosmetics, food, and personal care. Towards the starting of the quarter, the prices of Fatty acids remained on the upper edge as palm oil and coconut oil prices were high. Fatty Acid manufacturers faced supply shortages from Asian countries that as Indonesia and Malaysia. These countries restricted the export quantity of feedstock, palm oil increasing the gap between demand and supply chain in the regional market. Increment in feedstock prices led to a high production cost of Fatty Acids in the regional market. Towards the end of the quarter, the prices declined in the North American market as the manufacturers had ample feed to cater to the domestic market.
Asia Pacific
In the second quarter of 2022, the prices of Fatty Acids followed the uptrend in the Asian Pacific region. The key factors driving the market sentiments toward Fatty Acids include increased feedstock costs and palm oil in the regional market. Furthermore, the demand from downstream cosmetics, food, and personal care sectors remained active, proportionally governing the market sentiments toward Fatty Acids. Indonesia and Malaysia restricted palm oil export as the country faced product shortages in their domestic market. Furthermore, China faced lockdown restrictions halting the production of Fatty Acids in the domestic market. Demand from India, Japan, and South Korea remained brisk, governing the market sentiments of Fatty Acids in the regional market.
Europe
The second quarter of 2022 observed a fantastic hike in the prices of Fatty Acids in the European market on account of increased feedstock, palm oil, and coconut oil prices in the regional market. Asian suppliers restricted palm oil export, leading to a feeding shortage. The demand from downstream, soaps, cosmetics, and food sectors remained high throughout the quarter. The feedstock shortage occurred with the Fatty acid manufacturers as the supply chain was disrupted. Freight charges also remained high due to port congestion and vessel shortage in the domestic ports. This increased the production cost of Fatty Acids in the regional market
North America
In North America, the Fatty Acid prices surged upwards under pressure from the domino effect of feedstock Palm oil tightness in the overseas market. The Fatty Acid prices traded higher than contracts during Q1-2022 owing to soaring demand for cleaning agents. The supply-side constraints got enhanced by the continuing shortage of vessels from Europe due to the Russia-Ukrainian war, which led to supply disruptions in the international market. As a result, local downstream buyers had difficulty getting their hands on deliveries with container scarcity. Moreover, enhanced demand from the downstream personal care, cosmetic, and detergent industries brought prices to USD 1896/MT in March for Fatty Acid Stearic Acid Triple Pressed DEL USGC in the United States.
Being a heavily imported commodity, primarily from Indonesia and Malaysia, Fatty Acid pricing dynamics in Asia went to record heights and witnessed a bullish market scenario in the first quarter of 2022. The market fundamentals were stout against the surging demand for cleaning agents and personal care segments in the region on concerns over the omicron variant, which rapidly gained strength in China. Also, buying sentiments increased during the Chinese New Year and Beijing Olympics in early February. Players remained under cost pressure with increased raw material costs and constricted import volumes with export restrictions from Indonesia. Thus, the prices climbed steadily in China, reaching USD 6300/MT for Fatty Acid C8-C10 FOB Shanghai in March 2022.
In Q1-2022, the European Fatty Acid prices maintained a bullish trend taking strong cost support from the feedstock Palm Oil prices, which kept on skyrocketing in the global market. The high freight costs on raw material deliveries caused by logistical constrictions and the catastrophic energy crisis in the region with the geopolitical tension between Russia and Ukraine exerted further pressure on the input costs, thereby worsening the woes of the market players. In the meantime, the market sentiments of the downstream surfactant sector remained healthy as the consumer-buying trends improved across the region, keeping the uphill pricing trend at USD 3950/MT in Germany during the first quarter of 2022.
