For the Quarter Ending March 2022
Prices of linear alkyl benzene in the United States market increased throughout the first quarter of 2022. Prices hiked on the back of the inclining feedstock (crude oil) prices on the account of the escalating geo-political tensions in the eastern European region in mid-February. When Russia invaded Ukraine, it worsened the situation of the crude oil supply globally leading to high feedstock Benzene prices. At the end of the Q1 of 2022, linear alkyl benzene traded around USD 2080/MT in the US. Major companies and end–users’ preference of linear alkyl benzene as a detergent due to its eco-friendly nature assisted in the inclination of linear alkyl benzene demand in the American market.
The Asian market for linear alkyl benzene (LAB) started on a bullish trend as the availability of upstream Benzene was low owing to the failure to meet the supply need of upstream crude oil in the Asian countries. The prices hiked in March again as production in China remained halted on the account of winter Olympics. China is the major producer and exporter of LAB to Asian countries especially India, the production halts in February reflected in the price of the commodity during March. The price of LAB in the Indian market during the end of the first quarter of 2022 was USD 2848/MT.
Unlike the trends of linear alkyl benzene prices in the other markets, in the European market the price of linear alkyl benzene has been stable with very negligible price fluctuation throughout the first quarter of 2022. Europe despite being the most affected region from the invasion of Ukraine suffered unprecedented shortage of natural gas and crude oil but did not see a price hike of linear alkyl benzene as the Europe had strong inventory of detergent and cleaning products. LAB was assessed at nearly USD 2475/MT in the German market throughout Q1 of 2022.
For the Quarter Ending December 2021
LAB market in North America showed signs of bullishness with consistently rising prices during the whole of October and mid-November. The price rise was majorly driven by the tightness in benzene feedstock supplies on raging upstream crude oil prices along with low productions in the USA facilities that were on the path to recovery from Ida hurricane inflicted damages. Crippled spot activity also remained a major cause of concern for the traders. In December, the USA market witnessed down-revised prices on the boost in raw material availability towards end-November and December. Also, the relaxing port clogging enabled improved offtakes in the international downstream industries causing the December prices in the USA to hover around USD 1840/MT FOB Louisiana. Meanwhile, the local demand in the household cleaning and personal care sector also showed stability.
The discussions for LAB in the Asian market demonstrated firmness until mid-November under the influence of strong-getting benzene feedstock on the back of depleting upstream crude oil inventories. With a slight slip in the prices on the capped upstream market, the downstream cleaning and detergent industry accelerated their buying patterns during November-end in order to fill their inventories to avoid any delays in catering to customer demands. The improvement in import activity, as well as the year-end stock-clearing tendency among the Indian producers tamed LAB prices in the country, causing them to hover in the range of USD 1718/MT to USD 1908/MT during December.
High volatility in the upstream crude oil prices and crawling up demand from the downstream industries kept the prices of LAB to stay buoyed in Europe for a major portion of the quarter. Despite improvement in feedstock availability, December prices of LAB in Germany reached USD 2430/MT FOB Hamburg after showing a marginal fall from October and November trends owing to the surge in demand fundamentals due to increased cleaners and detergent consumption with the resurgence in Coronavirus cases.
For the Quarter Ending September 2021
The prices of Linear Alkyl Benzene (LAB) rose significantly in North America in Q3 2021 on the back of the consistent demand from the downstream industries. A tight supply of upstream benzene due to lower inventory levels and increasing raw material cost added to the supply side constraints in the production of LAB during Q3 2021. Increased demand from the downstream surfactant industry added upwards pressure to the pricing of LAB in the 3rd quarter. Hampered transportation activities and high freight costs were major concerns among the regional traders.
The overall market outlook of LAB experienced a consistent rise in the pricing trend across the Asia Pacific region in Q3 2021. In India, after falling dull early in August, discussions of LAB got bullish under the influence of consistent upward crawl in crude oil values and appreciable consumption for the downstream LABSA. Besides, as deliveries for LAB in India were not sufficient to serve the overall demand, buyers were willing of restocking cargoes even at premium prices to avoid any hurt to consumer sentiments in the upcoming festive season. Linear Alkyl Benzene (LAB) prices shot up from USD 1967/MT to USD 2154/MT during the third quarter.
In the European region, the domestic market showcased mixed sentiments during the third quarter of 2021. In terms of supply, upstream feedstock Benzene supply remained tight across the region which affected the supply fundamentals of LAB. The demand for Linear Alkyl Benzene from the surfactants industry remained muted due to lesser operations at the downstream plants during the quarter.
For the Quarter Ending June 2021
Despite of volatility in prices of feedstock Benzene, prices of Linear Alkyl Benzene (LAB) increased effectively increased throughout the quarter. The demand for Linear Alkyl Benzene remained sturdy to support the prices, while the availability remained tight due to lower inventory levels across the region. In addition, demand from downstream detergent and LABSA remained high that supported the overall price trajectory for LAB during this timeframe. In addition, the demand from the global market remained strong in the meantime, while the suppliers were anxious about unstable transportation activities, where the freight cost was shot up rapidly across prime trade route.
Asian market encountered firm demand for Linear Alkyl Benzene (LAB) during Q2 2021, backed by ample offtakes from downstream surfactant sector. In the Indian market, demand remained sturdy from downstream detergent manufacturers, under the second wave of COVID pandemic in the country. Therefore, prices of LAB accessed as USD 1952/MT during the final week of the quarter in India. In addition, IOCL and Gujarat government signed a MoU to provide infrastructure facility that includes tank truck loading facility for LAB, which is a small part of the big investment that aims to boost the production as well as transportation of several important commodities.
European manufacturers witnessed a stable demand outlook for LAB during this quarter, backed by sturdy demand from domestic and international market. Rising production cost was also marked as a major concern, which led to an effective hike in commodities prices. Meanwhile, Cepsa, a major oil and chemical giant of Spain, successfully switched the manufacturing process of LAB for environmental safety. This new process is expected to reduce the waste and water consumption during the LAB manufacturing process.
For the Quarter Ending March 2021
Devastated production activities across the US Gulf coast halted the overall output of LAB across the region. Amidst freezing weather, several major refineries like ExxonMobil, Total, Shell etc. faced unplanned turnarounds that reduced the availability of all prime upstream chemicals like feedstock Benzene. USA faced critical shortage of Benzene, which affected the prices of almost all the downstream chemicals including LAB. It is estimated that more than 74% of total Benzene output was halted during this period, which made the LAB prices to shoot up during the quarter.
The Asian market observed mixed sentiments during this quarter, the demand remained firm from downstream detergent segments and varied country wise across the region. Sturdy crude oil values and lower spot availability of Benzene supported the price of LAB during this quarter. Hence prices of LAB followed an upward trend across the region. In the Indian markets, LAB value surged from USD 1383.7per MT (January 2021) to USD 1467.5 per MT (March 2021) despite stable demand fundamentals in the market.
Unlike the Asian and North American countries, Benzene prices in the European region followed a downward trajectory backed by adequate availability and feeble demand. Second wave of COVID-19 impacted the functionality of downstream industries, hence the demand for LAB remained low from downstream segments. However, high freight cost and shipping container shortage supported the export prices for the region.
Discussions in the Asian Linear Alkyl Benzene (LAB) market were mostly thin for the quarter ending September 2020. Although negligible change was observed in demand fundamentals due to the pandemic, negotiations prompted by the traders to initiate better offtakes shrouded the contract prices due. Nonetheless, the skyrocketing demand from the detergent and cleaning industry failed to provide prominent gains as manufacturers flooded the market with excess supply. However, with consistent growth in market sentiments of feedstock Benzene, the hovering outlook of LAB is anticipated to bounce back by the next quarter.
With increased consumption from surfactants and cleaning products as a preventive measure of the global contagion, the demand for Linear Alkyl Benzene in the region has witnessed appreciable gains. However, with reduced panic procurement and stockpiling of the product, the market fundamentals of LAB have considerably stabilized. Manufacturers have suffered fall in their profit intakes on mounting inventories of the product and no severe cut implemented in the operating rates. However, LAB market dynamics are likely to trace fast recovery with surface chemical industry continuously experimenting with new products expressing optimism over improved demand by the next quarter.
The third quarter for the LAB market in Europe remained firm with continuous demand for surface cleaning products under strict industrial practices to maintain hygiene. Consumption of LAB in the surfactants and derivatives further exacerbated with resurgence of the coronavirus contagion in several parts of the region. With no planned turnaround in the near term, market players were cautious over supply outstripping the demand that ultimately led to reduced profit margins. As there are no hopes for complete abatement of the virus till date, the demand is likely to observe no appreciable change in future.