For the Quarter Ending June 2021
During Q2 2021, North American Stearic Acid market witnessed firm sentiments, as the demand remained consistently strong, and prices rose effectively. The demand for Stearic Acid from the downstream soap and detergent sector remained sturdy throughout the quarter in USA, followed by demand from rubber and intermediate chemicals segment. In addition, soaring upstream Palm Oil prices in Asia also impacted the prices of Stearic Acid across the region in the meantime. Therefore, prices rose from USD 1132/MT to USD 1222/MT during this quarter in USA.
Stearic Acid prices kept fluctuating throughout the quarter in APAC region, due to volatility in feedstock prices. In China, prices of Stearic Acid remained high due to sturdy offtakes from the domestic market after strong economic rebound of the country. While in India, prices kept fluctuating due to uncertainties caused by pandemic and high volatility in prices of Palm Oil. Traders restrained to procure Palm Oil for the product, due to the uncertain demand pattern and availability of other alternatives in the market. Therefore, price eventually slipped to USD 876.8/MT during the last week of June in India.
Europe witnessed stable demand for Stearic Acid during this quarter, supported by firm offtakes from the downstream rubbers and detergent manufacturers. Prices of Stearic Acid rose effectively across the region due to expensive cargoes of Palm Oil from Asia and sturdy offtakes be the downstream end users. In addition, soaring freight cost and rise in production cost, also exacerbated the overall price increment on Stearic Acid in the meantime.
For the Quarter Ending March 2021
The North American market encountered a steady rise in prices of Stearic Acid during Q1 2021. Despite of the stable demand from the downstream automotive and adhesive segment, prices rose effectively due to the material shortage. This rise was bolstered by severe shortage of feedstock chemicals and halted production activity after US gulf storm in February. Thus, the prices traced a sharp upturn of about 9.17% and hovered around USD 1130 per MT during March end across USA. This steep rise was also supported by expensive cargoes from Asian countries, as the prices of raw materials were running all time high during this timeframe.
Demand fundamentals in the Asian market also fluctuated in a stable to firm range, where post COVID 19 recovery brought improvement in rubber, lubrications and other automotive segments. However, these sectors were not fully restored and were running on lower pace compared to prior year, but the improvement was significant enough to drive changes in prices of Stearic Acid. Thus, the prices improved effectively and hovered around USD 930.6/MT during mid of January 2021 in Indian market. However, Asia was also struggling to procure raw material Palm oil, which was fuming those days.
In Europe, Stearic Acid prices also encountered a steady rise, despite of the low demand from downstream segments. This price rise was led by accelerating raw material prices amidst severe global shortage. In addition, expensive imports from Asia also supported this price rise. However, the demand remained low from downstream automotive segment, as the second wave of COVID 19 resisted proper industrial activities and reduced the sales of automobiles across the region.
For the Quarter Ending December 2020
Demand for Stearic Acid in the Asian market remained firm as various countries like China and India were heard utilizing their full capacities to make up for the loss incurred in H1 2020. Pick up in demand in India during the festive season in November also contributed to a prominent surge in its values. Consistent hike in the prices of feedstock palm oil across Southeast Asia has provided an astonishing upward push to the prices of Stearic Acid. With palm oil futures rising to an almost eight year high in December, and Indonesia levying an increase in the tax over its oil exports, price of Stearic Acid is expected to remain in a stable to firm range in H1 2021. The price for Rubber Grade Stearic Acid in India for the quarter ending December 2020 was averaged at USD 853 per MT.
Firm demand for Stearic Acid from the polymer and textile industry has sustained its rich market sentiments in Europe. As European Union is eyeing to reduce the imports of palm oil as it leads to increased deforestation activities, concerns of stressed availability of the feedstock has provided a forward push to the prices of Stearic Acid in the regional market. In early October, market fundamentals of Stearic Acid remained in a narrow range as various end-use industries kept operating their plants at reduced rates under fears of demand uncertainty. However, the plant utilization rates gradually improved under the optimism that prevailed from the consistent upward push in crude values.
With the consistent increment in prices of the feedstock Palm Oil, Stearic Acid prices in the US took an uptrend later in the quarter. The supply of palm oil tightened towards the end of the quarter when USA declared a straight ban on the imports from several Malaysian producers including Sime Darby Plantation Berhad and FGV Holdings, under the allegations of labor abuse. As the supply of Palm Oil from its largest exporter Malaysia is bound to decrease, prices of derivative Stearic Acid are expected to remain firm in the near-term. Rising Brent crude is further anticipated to support the price trend in the region at least till Q1 2021.