For the Quarter Ending June 2021
In North America, Fatty Alcohol prices kept rising during this quarter, backed by firm demand from domestic downstream sectors. Freight remained high in effect of congestions at several trade routes and tight logistics availability in the USA. Suppliers revealed that, they faced difficulties in transporting their cargoes, as there was very low availability of trucks and rail mode transportation. Therefore, due to low supply activities prices kept tracing upward trajectory during this quarter and led the prices to reach USD 1510/MT and USD 1350/MT for C12 and C-10 respectively during the month of June in USA.
Under firm demand from market, rapid resurgence of COVID cases in several Asian countries, including India, Malaysia, Singapore, Taiwan, Thailand, and Vietnam, led to a critical shortage for palm oil across the region. Malaysian government announced restrictions on palm oil and other refineries to curb the spread of COVID infection in the country. While second wave of pandemic hit India during April mid, which reduced the overall imports of palm oil in the country due to low demand for Fatty Alcohols. However, prices remained buoyant throughout the quarter, due to a wide demand supply gap. While only C16-18 was the only grade, whose price declined due to low demand in India. Therefore, price of C16-18 and C18-22 hovered around USD 1546/MT and USD 1632/MT during the month of May in Indian market.
European market witnessed firm demand for Fatty Alcohols during this quarter, backed by improved offtakes from the domestic market amidst supply shortage. Due to fresh COVID restrictions in major palm oil exporting countries in Asia, prices of palm oil kept rising despite of reduction in their domestic demand. In addition, rising freight and shipment cost, along with rising production cost due to global inflation, exacerbated the prices of Fatty Alcohols during this timeframe. While the demand from downstream surfactant and cosmetics segment remained buoyant throughout the quarter across the region.
For the Quarter Ending March 2021
The prices of Fatty Alcohols experienced a significant rise in the US during Q1 2021. Some traders cited that high volatility in feedstock PKO and strong prospects for the downstream surfactant industry as the possible price mitigating factor. This rise was largely driven by palm oil supply crisis going on globally as the Fatty Alcohol market of North America largely rely on palm oil. While palm oil prices were very soaring high, the winter storm further disrupted the supply activities across the region. Offers for Fatty Alcohol were averaged around USD 1900 per MT during the quarter.
The Asian Fatty Alcohol market remained largely stable throughout the quarter. In India, stable demand from the downstream sectors like surfactants and cosmetics reserved its stability. Although the supplies remained tight prompting producers to raise offers so as to maintain their margins. CFR price of Fatty Alcohol (C18-C22) at JNPT port increased by 0.47% to USD 1517.5 per MT in March. Amid extreme shortage and skyrocketing prices of palm oil, manufacturers shifted to other alternatives to manufacture Fatty Alcohols and to provide stability to its prices.
Surging palm oil prices and shipping containers shortage drove the fatty alcohol prices upwards in Europe during Q1 2021. As per the data revealed by Malaysian Palm Oil Council (MPOC), total palm oil imports by the European Union are projected to reach around 4 million tonnes in the first half of 2021. Although the demand from downstream surfactant sector was high amidst surging COVID-19 cases. In some places, demand was stable due to force majeures at some manufacturing units. But soaring regional demand for household products kept the sentiments upbeat.
For the Quarter Ending September 2020
Fatty Alcohol market remained largely subdued in the beginning of the third quarter, but trades and discussions were heard picking up towards the end of Q3. The market participants looked anxious over volatility and escalation in price of the key feedstock palm oil. However, some anticipated the prices to ease with the arrival of the peak harvest season, in the Aug-Sep period. Limited upstream stocks in Indonesia and Malaysia tightened the supply of oleochemicals across Southeast Asia with some buyers waiting for the feedstock prices to soften till August-end to support production margins. Recovery of certain downstream sectors remained a key concern for both buyers and sellers who preferred to keep the offers low to avoid inventory pile ups. CFR India price of C18-C22 Fatty Alcohols were assessed around USD 1400 per tonne, showing slight improvement on QoQ basis.
US Fatty Alcohol market during the third quarter was largely driven by volatility across the oil palm complex, as demand from the key end-markets outside the cleaning sector showed muted recovery from the pandemic blows. Supply was heard easing with the arrival of delayed shipments from Asia while the demand in the rest of the America’s remained dampened during Q3 2020. However, temporary disruptions due to seasonal hurricanes across several parts of the US gulf and rising COVID-19 cases remained a significant concern among the regional traders. Many believed that the demand surge during Q2 proved to be short-lived, as supply lengthened with a gradual lift in lockdowns and other coronavirus-related movement restrictions prompting consumers to get back to normal purchasing habits.
Supply chain disruptions which were heard during Q2 across Europe were heard significantly easing moving into Q3, prompting buyers to replenish their stocks. At the same time, suppliers were cautious as production may remain impacted as some Fatty Alcohol producers in Europe were planning to announce turnarounds and maintenance-related work in the coming months, thereby affecting the supply. Buyers remained of the view that the price trend going ahead, will all depend on the way palm kernel oil (PKO) behave as the demand continued to soften but higher PKO costs may mitigate the trend in the forthcoming quarters.