Feb US mid-cut fatty alcohol spot prices rise on strong demand

17 February 2010 22:24  [Source: ICIS news]

HOUSTON (ICIS news)--Mid-cut detergent-range US fatty alcohol spot prices are rising into the high 70s cents/lb on strong demand, driving up second-quarter contract expectations, buyers said on Wednesday.

Buyers confirmed spot prices ranging 71-77 cents/lb ($1,565-1.698/tonne, €1,142-1,240/tonne) were done for February business.

January spot transactions were done broadly within a 62.50-69.50 cents/lb spread, buyers and sellers said. That matched the 62.50-69.50 cents/lb first-quarter contract range, according to global chemical market intelligence service ICIS pricing.

“Second-quarter contracts will probably go up on the higher spot prices,” one buyer said.

The US fatty alcohol market is increasing spot purchases for detergent-range fatty alcohols, largely because of its position as a net importer of these alcohols, most of which come from Asia.

In the fourth quarter of 2009, US buyers sought more spot alcohol placements in order to keep shorter inventories and to cope with the swift rise in costs of feedstock natural oils such as palm kernel oil (PKO) in Asia.

A seller said about 50% of the detergent-range alcohol market was now taking place in the spot arena, a change from the traditional US quarterly-contracted business norms.

US-based sellers have also moved away from formal increase announcements, choosing instead to take an account-by-account approach on alcohol prices.

US domestic fatty alcohol producers include Procter & Gamble, Shell and Cognis. Importers include Kao, VVF, Godrej and Musim Mas, among others.

Buyers and end users of mid-cut detergent range alcohols include most major detergent and surfactant producers.

($1 = €0.73)

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By: Judith Taylor
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