Asia fatty alcohols hiked on falling glycerine

25 June 2008 04:06  [Source: ICIS news]

By Jeremiah Chan

SINGAPORE (ICIS news)--Natural fatty alcohol makers in Asia pointed to falling co-product glycerine prices as one of the key factors behind nominated hikes for third quarter settlements, producers said on Wednesday.

“Glycerine is going to be a problem,” a source from a major Indian fatty alcohol producer said, as glycerine - regarded as the silver lining of the oleochemical industry over the past year due to skyrocketing prices - began to tumble.

Refined glycerine prices have fallen by almost 30% over the past three months, on the back of high inventories and lacklustre demand. Glycerine off-take is estimated at 10% of natural fatty alcohol production, and has a substantial impact on fatty alcohol production costs.

One southeast Asian fatty alcohol major pointed out that they would have to hike prices by at least $50/tonne in order to maintain their margins following a dramatic drop in glycerine values.

Offers for third quarter C12-14 mixed alcohols in Asia were reported at $2,000/tonne FOB (free on board) SE (southeast) Asia this week, representing a $100-150/tonne increase from second quarter settlements, although some sellers conceded that such hikes remained a challenge to implement.

Fatty alcohol majors in the region include Kuala Lumpur Kepong, Cognis Oleochemicals, Proctor and Gamble and Ecogreen Oleochemicals.

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By: Jeremiah Chan
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