For the Quarter Ending June 2021
During the second quarter of 2021, the North American LABSA industry improved drastically as the resumption of industrial operations after Q1 setbacks increased o availability of LABSA in the domestic market. The situation was further favoured by the continuously improving production rates at several manufacturing facilities as the supply chain recovered from the impact of winter storm Uri. Demand were consistent from the downstream surfactants industries and the offtakes from the consumer goods sector were surged. Soaring Benzene continued to send ripples to the LAB prices. As a ripple effect, the supplies of LABSA in the US domestic market took an uptrend with FOB New Jersey prices were assessed at USD 3250 per tonne in June.
In the second quarter of 2021, LABS supplies were ample in the Asia pacific region, however surging values of the key feedstock LAB provided the cost support to the LABSA prices in the Asian markets. The pricing trend was supported by the rising inflation rates on the key raw materials in China, and record breaking surged in the price of upstream Benzene remained. Due to the rising COVID cases in India, the market activities were restricted, and the bulk procurement activities were reduced in the first half. Despite hovering uncertainties, LABSA purchases from the detergent manufacturers were sufficient to keep the demand fundaments firm throughout the quarter. Due to exceptionally high-cost feedstock LAB, the prices of LABSA maintained firmness in the second quarter with Ex-Works Mumbai (India) discussions settled at USD 1724 per tonne in June.
LABSA supply conditions in the European region improved during the second quarter of 2021, owing to the improved production margins as the raw material shortages were cured as the supply chain restored with the improvement in the climate conditions. Furthermore, imported volumes from the USA increased as the industrial activities in the Gulf coast region recovered from the impact of the polar winter storm Uri. LABSA procurement was consistent throughout the European region which showcased surged demand outlook as offtakes were consistent from the surfactant industries to meet the end-user enquiries. The pricing trend stabilized in Q2 after observing an uptrend in Q1.
For the Quarter Ending March 2021
LABSA supplies were tight, owned to significant halt in regional production activities amidst severe freezing conditions resulting in disrupted supply chain across the USA gulf region. The rare climatic condition forced the several upstream Benzene players to shut down the production including ExxonMobil, Total, Shell etc., causing severe shortage of raw materials during the first quarter of 2021. Demand surged due to the constant offtakes from the downstream soap and detergent industries, which led the LAB and LABSA prices to shoot-up during the quarter.
Asia Pacific LABSA supplies witnessed mixed sentiments during the first quarter of 2021, owing to limited spot availability of Benzene and constantly surging prices of Crude Oil across the region. Stronger upstream rates sent ripples to price of both LAB and LABSA which touched record highs during the quarter. The demand kept a firm stance as the offtakes were constant from the downstream cleaning industries and high consumer sentiments. In the Indian market, Benzene supply-demand gap significantly widened pushing CFR prices of LABSA to USD 1488 per tonne in February.
LABSA supplies were balanced to tight in the European market owned to the limited availability of Benzene. Supply constraints were witnessed as the plants operated at low production rates due to delayed transportation of key raw material and severe cold weather in the northwest European region. Demand remained stable initially in the quarter. With surging rate of COVID infections towards the end of the quarter, the demand gained pace due to its increasing end-use in detergents and other cleaners amid rising consciousness among netizens.
Market fundamentals of the Asian Linear Alkylbenzene Sulfonic Acid (LABSA) remained mostly flat for the quarter ending September 2020. Although minor fluctuations were witnessed in demand pattern due to the global contagion, negotiations offered by the traders to instigate improvement in offtakes eased off the contract prices. Meanwhile, budding demand from the detergent and cleaning industry failed to provide prominent gains as manufacturers filled the market with ample supply. However, with consistent growth in market values of feedstock Benzene, the lingering outlook of LABSA is anticipated to revive in the coming months.
The demand for Linear Alkylbenzene Sulfonic Acid (LABSA) in North America witnessed promising gains in the previous quarter on its increased consumption for surfactants and cleaning products under the stress of global contagion. However, with reduced panic procurement and stockpiling of the disinfectants and cleaning products, market values of LABSA have considerably stagnated. Profit intakes of manufacturers and traders were hurt on mounting inventories of downstream products following consistent operating rates. Nonetheless, LABSA market dynamics are likely to outline rapid recovery with surface chemical industry continuously innovating fresh products under optimism over increment in demand by the next quarter.