For the Quarter Ending June 2021
Fatty Alcohol Ethoxylates (FAE) prices-maintained buoyancy during this quarter, backed by firm demand from downstream surfactant manufacturers in the North America region. However, the feedstocks Ethylene Oxide and Fatty Alcohol showcased mixed sentiments during this period. Fatty Alcohol prices remained bullish throughout the quarter in USA, due to firm demand and expensive imports from Asia. The overall price trend of FAE remained bullish, supported by firm offtakes and high feedstock prices in USA, during this quarter. In addition, logistical issues further added value in the prices of FAE, amidst tight supply of fatty alcohols.
The demand of Fatty Alcohol Ethoxylates (FAE) showcased bearish sentiments during this quarter in APAC region, due to reduced demand from downstream surfactant manufacturers. However, manufacturers from China exported more than 1014 MT to Indian downstream surfactant manufactures during the month of June. Overall import activities remained muted in May, under the pressure of pandemic in India. In addition, compared to the previous quarter, imports of FAE increased to almost double in Q2 2021, while most of the shipment were traded from China to India. The reason behind this rise in imports was inadequate availability of FAE in the country, as importers were planning to procure cargoes for future demand in domestic market. Therefore, overall scenario created a jump in prices of FAE in the Indian market, where the price settled at USD 1735/MT for C18-22 and USD 1705/MT for C16-18 in India during June.
Rise in feedstock fatty alcohol prices supported the uptrend of Fatty Alcohol Ethoxylates (FAE) in Europe during Q2 2021. While the demand from downstream surfactant sector remained bullish throughout the quarter, backed by improving offtakes from domestic end users. However, ready availability of FAE remained low in the region that increased the demand for imports. While the imported feedstock prices were higher than the previous quarter, due to extreme rise in prices of upstream palm oil in Asian countries like Malaysia. Therefore, the overall price trend of FAE remained high in Europe during Q2 2021.
For the Quarter Ending March 2021
Shortage of feedstock chemicals compelled makers to raise their FAE prices across the region. Under winter freeze in the US gulf coast several plant operations remained idled, creating acute shortage of feedstock Ethylene Oxide (EO) and Fatty Alcohols. More than 65% of EO production was observed halted which led to rise in its prices. In addition, low availability and fuming prices of palm kernel oil (PKO) drove the prices of Fatty Alcohols to crazy high. Continued shipping delays, persistent labour shortages and tight shipping lent a strong support to price curve. While the demand for downstream surfactants remained well support many consumers awaited lift in raw material plant shutdowns. Shell confirmed to lift the force majeure at its linear alcohols and ethoxylates plant at US Geismar, Louisiana, by the end of April.
In the Asian markets, sufficient availability and high demand amid soaring feedstock prices, caused fluctuation in the prices Fatty Alcohol Ethoxylates (FAE). Due to consistent increment in the upstream crude oil value, prices of downstream chemicals also increased including feedstock EO in the region. In addition, Chinese Lunar New Year holidays and container shortages across prime trade routes drove the prices of several chemicals to rise effectively including FAE. In the meantime, the price of Fatty Alcohol Ethoxylates (FAE) kept oscillating and hovered around USD 2207.7/MT in the Indian market.
The European countries also faced the shortage of feedstock EO and Fatty Alcohols, which ultimately skyrocketed the prices of Fatty Alcohol Ethoxylates, finding key usage in surfactants. Huge shortage and crazy high prices of palm oil further supported the prices of fatty alcohols, and volatile prices of EO due to shortage of Ethylene also marked a steep rise during the quarter. In addition, all these factors, battered with high freight and container cost, compelled the prices of Fatty Alcohol Ethoxylates (FAE) to gain a significant value.
For the Quarter Ending December 2020
Realizations for FAE were pegged higher than the previous quarter amid traders turning cautiously optimistic on the demand front. Acute volatility on the raw material front which seemed oscillating in terms of pricing over periods of time significantly raised FAE offers for Q1 2021. Malaysian palm oil prices jumped straight to eight-year highs in November after hampered production levels in October. Demand from the cleaning sector seemed buoyant after restocking activity from the buyers took a big leap before the year-end. The raw material surge triggered a sharp spike in Fatty Alcohol offers in India which were averaged around USD 1665 per tonne in December. Some producers expressed anticipations that reduced annual palm harvest in Southeast Asia will put upwards pressure on the regional market even in the next quarter.
Buoyant performance of the surfactant industry propped up the regional Ethoxylates production as manufacturers reported high plant utilization rates and improved sales. Upstream Ethylene Oxide and Fatty Alcohols showed significant jump in prices due to limited material availability. Traded volumes remained affected due to constrained ocean logistics in the last three months of the year, keeping the CFR prices significantly up from the previous quarter. The quarter started with a mega deal between two chemical giants-Lyondellbasell and Sasol wherein the former proposed to buy 50% stake in the latter’s newly constructed Lakes Charles project. As per the deal, Sasol will retain its alcohols, ethylene oxide/ethylene glycol, and ethoxylation plants, and hand over 50% stake in its ethylene cracker and in LDPE and LLDPE plants to Lyondellbasell.
The European FAE market remained weighed under supply chain disruptions despite some unplanned cracker turnarounds during the quarter ending September. Abrupt surge in the Asian Fatty Alcohol rates starting mid-November raised the overall production cost for the European FAE producers. While volatility in the feedstock palm oil prices continued to pose the industry at risk, resilient demand for surfactants raised the regional offers. The Malaysian Petronas Chemicals Group (PCG) and the German chemicals and energy company PCC entered into a strategic partnership to construct the oxyalkylates (ethoxylates and polyether polyols) facility within the Kertih Integrated Petrochemical Complex, Terengganu. The construction is likely to begin in 2021.