For the Quarter Ending June 2023
North America
Linear Alkyl Benzene Sulfonic Acid (LABSA) market in the US witnessed mixed sentiments in the Q2 of this year, 2023. The price of LABSA surged in April but fell in the month of May and June in the US market. The fluctuations were on account of demand from the downstream surfactant industry. The US banking crisis and increased interest rates, with the fear of recession in the US, have caused purchasing activities to slow down. Further, the lackluster demand, along with a surplus supply of the product, has impacted the prices of the LABSA. The price of LABSA FOB Illinois (USA) in the quarter was reported as USD 3258/MT in April, USD 3230/MT in May, and USD 3059/MT in June. The upstream Benzene has also shown a similar price trend, rising in April but weakening by the end of the quarter. The declining manufacturing index in the US has also contributed to the weaker market outlook. As per ISM data, the manufacturing PMI index has been decreasing as it was 47.1 in April, 46.9 in May, and 46 in June, indicating a contraction in the manufacturing sector in the US.
APAC
During the second quarter, the market showed mixed sentiments for LABSA in the APAC region. The price of LABSA rose in April but kept declining for the rest of the quarter in South Korea. However, in the Indian and Chinese markets, prices fell in April and June but declined in May. The primary reason for the decline in the APAC region is the weaker procurement activities in the Chinese and Indian markets, along with ample product availability. The Chinese economy’s deceleration and reduced market confidence have resulted in a decline in the prices across the Asia Pacific region for LABSA, which is a significant import for the Chinese market. The price of LABSA FOB Busan in South Korea was quoted as USD 1610/MT in April, USD 1513/MT in May, and USD 1460/MT in June. The upstream Benzene has also followed a similar trend and supported the price movement of LABSA as the Benzene prices increased by 1% in April but fell by 6% and 4% in May and June this year.
Europe
In the Q2 of this year, 2023, the prices of LABSA in Europe surged in the first month but declined by the end of the quarter. In the month of April, the demand was adequate from the downstream surfactant industry; however, due to subdued demand and ample availability of the product, the price fell for the next two months. Further, the market dynamics and conditions were impacted on account of recession and geopolitical tensions due to the Russia-Ukraine war. The global economic slowdown and market uncertainties have caused market participants to show a cautious approach toward making fresh purchases. Also, the increased inventories have led the sellers to offer discounts leading to reduced costs. The upstream Benzene has also shown a similar price trajectory as it rose in April but declined in May and June, influencing the LABSA prices. The LABSA FOB Hamburg prices in Germany were USD 1547/MT in April, USD 1408/MT in May, and USD 1366/MT in June. Moreover, the annual inflation rate in the Euro area fell to 5.5% in June 2023 from 6.1% in May 2023, as per Eurostat data, the statistical office of the European Union. Although the inflation rate has reduced from the all-time hike, the rates still remain high, keeping consumers hesitant to buy products.
MEA
The Middle East Asian region has seen fluctuations in the price of LABSA in the second quarter of the year. However, the prices have shown an upward trend in the starting two months of the quarter but declined by the end of the quarter in June on account of reduced demand. The fluctuation in LABSA prices was seen due to changing prices of upstream Benzene as a similar trend in prices was followed. The increase in price was seen due to raised demand for LABSA from the downstream surfactant industry in the domestic market of Saudi Arabia. Also, the raised prices of Crude oil have strengthened LABSA prices. The decline in June was seen as the Crude Oil and Benzene prices eased, and the demand was subdued along with a surplus supply of the product. The price for LABSA FOB Jeddah in Saudi Arabia was USD 1593/MT in April, USD 1634/MT in May, and USD 1577/MT in June. The price rose by 1% and 3% in April and May, respectively, while product prices declined by 3% in June 2023.
The market for Linear Alkylbenzene Sulfonic Acid displayed bullish emotions in the first quarter of 2023 because of increased demand and upstream (crude oil) prices in the local market. Active buying from the LABSA sectors has resulted in favorable improvements to the dynamics of the feedstock LAB and sulphonic acid market. Additionally, the robust economic expansion increased market activity. The need for downstream industrial surfactants surged as several petrochemical refineries regained full production levels, which also contributed to the rise in LABSA demand in the US. The price of Linear Alkylbenzene Sulfonic Acid in the American market climbed towards the end of the quarter as a result of rising upstream benzene costs in the US. The rising demand in March for downstream surfactants assists the increasing cost of LABSA in the American market. Linear Alkylbenzene Sulfonic Acid FOB-Illinois (USA) were assessed at USD 3244/MT.
In Asia, the cost of Linear Alkylbenzene Sulfonic Acid has been continuously increasing this quarter. The price of LABSA in South Korea has risen because of growing upstream LAB costs. The average supply of LABSA has been produced as a result of the market's rising upstream costs in South Korea. The region's overall demand remained high as well. Due to the rising end-user demand for downstream surfactants and detergents, there was a critical need in South Korea. The upstream laundry sector's expanding demand in China is what is causing the price of LABSA to increase there. The price of Chinese Benzene upstream increased, which increased the cost of LABSA. FOB-Qingdao (China), Linear Alkylbenzene Sulfonic Acid, USD 1550/MT.
The global market for Linear Alkylbenzene Sulfonic Acid saw negative sentiment throughout the first quarter of 2023 as a result of altering upstream (crude oil) prices. The regional market's volatile prices for crude oil contributed to a decline in product demand. Due to a combination of multiple inadequate consumer needs and falling upstream and energy prices, the German market for LABSA pricing has collapsed. Low consumer demand, an abundance of supply, and rising energy prices have combined to shrink the market for LABSA pricing in Germany. Despite the region's seasonal variations, as the product's demand shrank, the inflation rate stabilized. The estimated price for LABSA FOB Hamburg (Germany) was USD 1526/MT.
