For the Quarter Ending December 2021
The LABSA market in North America stood strong throughout October and November due to price escalations in its feedstock LAB backed by bullish benzene and crude oil upstreams, which got translated into the input costs of LABSA. Low feedstock output from Ida hurricane-affected facilities in the USA and trade constraints due to crippled logistics across ports made the manufacturers struggle in fulfilling enquiries from the domestic and international buyers. The USA market took a sigh of relief from the fall in upstream prices due to gradual build-up in the inventories as the majority of the production units restarted operations causing the Linear Alkylbenzene Sulfonic Acid (LABSA) prices to fall to USD 1320/MT FOB New York during December at a rate of 4% from the record high prices in November.
Though the initial two months of the quarter recorded an overall buoyed market trait in Asia, the month-specific price trends differed country wise. The discussions for LABSA in China remained highest during October on the back of feedstock tightness and slump in production activity owing to China’s Dual Control Policy. With falling upstream futures, the prices plummeted gradually through November and December during when the prices settled at USD 1541/MT and USD 1515/MT FOB Qingdao, respectively, with demand faltering a little due to stockpiling of LABSA inventories by the downstream sectors during the initial days of December. In India, the Linear Alkylbenzene Sulfonic Acid prices peaked during November with extreme tightness in raw materials in the international market and a 60-70% rise in freight costs. Amid high demand, the traders were heard revising their offers frequently in order to improve their margins. However, the retracing upstream market from skyrocketing trends during November end, as well as the quickly-pacing stock clearing activity in the Indian market before the approaching new year caused the traders to stick to low contract prices that hovered around USD 1166/MT to USD 1381/MT in December.
Oscillating between catastrophic energy tightness and surging raw material prices, the LABSA market in Europe represented raised sentiments throughout the quarter. The Linear Alkylbenzene Sulfonic Acid prices rose incessantly with every passing week in Germany as the downstream detergent sector continued on unwavering demand fundamentals with the rise in Coronavirus cases. Constraints in spot trading in addition to high input costs also remained a point of concern for the manufacturers. Despite the slight relaxation in the container crisis, the LABSA prices in December, which hovered around USD 1725/MT FOB Hamburg, registered the highest price values propelled by the surge in downstream demand both in domestic and international markets.
For the Quarter Ending September 2021
The overall market of Linear Alkylbenzene Sulfonic Acid showcased mixed sentiments across the North American region in Q3 2021. In the US, LABSA prices witnessed a slight downtrend during H1 of Q3 due to lowered prices of feedstock benzene. However, a short sharp surge was recorded during the hurricane season as the supply of Benzene was hard to find. Increased costs of transport and intermittence in power supply in and around regions of the gulf coast as well as the disruptions in the supply chain caused by tropical storm Nicholas in the state of Texas also contributed to the spike in the regional prices. Prices are however expected to stabilize in Q4 as the supply of Benzene eases up and logistical costs come down as well.
The Asian LABSA market witnessed a downward trend in the third quarter of 2021 as the prices of raw material Linear Alkyl Benzene observed a major decline during Q3 across the region. In India, LABSA prices kept on declining in August under the pressure of stabilizing feedstock prices amid stable offtakes from the domestic market. Major detergent and surfactant manufacturers revealed that they had to revise their product prices while protecting their profit margin in Q3. Producer’s margins had been significantly reduced due to consistently increasing feedstock prices coupled with soaring freight costs. The price of LABSA declined significantly and eventually settled at USD 1342/MT from USD 1758/MT in September.
The regional market demonstrated mixed trends in Q3 of 2021 across the European region. LABSA supplies remained tight during the quarter due to a restricted supply of feedstock benzene across the region. The demand for Linear Alkyl Benzene Sulfonic Acid from the downstream surfactants and detergents industry remained low due to lesser buying momentum in the end user industries. Resumption of several Benzene production units towards the end of Q3 supported the production to get back to its norm.
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.