Lonza levies Q3 oleochemical hikes of up to 30%

20 June 2008 14:21  [Source: ICIS news]

LONDON (ICIS news)--Lonza plans to raise its oleochemical and biocide prices by up to 30% in the third quarter on higher feedstock, energy and transportation costs, according to a company press release on Friday.

The company intends to implement the increases effective from 1 July 2008 or as contracts allow and will continue its aggressive efforts at cost control, while maintaining security of supply to its customers, it said.

Other European oleochemical producers were also looking to recover the raw material increases in the third quarter, particularly in view of the softer glycerine values, the bi-product of oleochemical manufacturing.

In the fatty alcohol and fatty acid markets, third-quarter target hikes ranged from €50-200/tonne ($77-308/tonne), depending on source.

One fatty acid buyer said it would be prepared to accept some upward movement based on the higher upstream costs, but considered increases of 30% unrealistic, particularly as prices had risen successively over the last two quarters.

In the second quarter, fully hydrogenated tallow stearic acid prices were assessed between €875-930/tonne FD (free delivered) NWE (northwest Europe) and distilled standard tallow oleic acid was valued between €1,000-1,050/tonne, up €30-35/tonne from the first quarter.

Triple pressed vegetable stearic prices were assessed at €900-1,000/tonne and standard palm oleic at €1,050-1,100/tonne, which represented increases of €50-100/tonne from the previous quarter.

In the fatty alcohol market, C12-14 prices were mainly agreed between €1,340-1,400/tonne FD NWE in the second quarter, up €100-150/tonne from the previous quarter, according to global chemical market intelligence service ICIS pricing.

Other oleochemical market players include Shell, Sasol, Cognis, P&G, Huntsman, Taminco and Unilever.

($1 = €0.65)

For more on oleochemicals visit ICIS chemical intelligence
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By: Heidi Finch
+44 20 8652 3214

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