US detergent fatty alcohol prices pressured on supply concerns

27 April 2010 23:07  [Source: ICIS news]

HOUSTON (ICIS news)--US prices for detergent fatty alcohols are facing pressure from supply concerns, buyers and sellers said on Tuesday.

Pushed by erratic import supply, detergent-range alcohol prices were pressured up, and spot market demand was forming, according to market players.

Stuttering supply shipments from Asia were causing buyers to deal with scrimped inventories amid emerging improvement in US demand that left some players with nearly empty alcohol storage tanks, sources said.

Early market discussions about strong upward price pressure for the third quarter were also being heard because the second-quarter levels were basically gone, buyers said. 

Second-quarter C12-14 natural and synthetic and C12-15 synthetic detergent alcohol contracts were assessed at 72-79 cents/lb ($1,587-1,742/tonne or €1,190-1,306/tonne), according to global chemical market intelligence service ICIS pricing.

Buyers that needed to source additional alcohol volumes beyond anything contracted for the second quarter formed the core of the developing spot market for detergent-range material, according to market participants.

Spot prices for any C12-14 natural or synthetic or C12-16s were firmly in the 80s cents/lb this week, buyers and sellers said.

Asian fatty alcohol producers have become increasingly able to move material into alternate markets, reducing the need to export to North America, sources said.  

Another avenue available to fully integrated oleochemical producers was to stop at fatty acid production and not make the alcohols, depending upon the margin opportunities, sources said.  

Still another issue sellers pointed out was the overall time required within their various systems – from feedstock to production to logistics to sales – that was necessary in order to service the North American market.

The length of time involved was a consideration that made global regions other than North America and Europe increasingly attractive, sellers said.  

“It’s a mess,” one seller said.

Domestic US natural fatty alcohol producers include Procter & Gamble and Cognis. Shell Chemical and Sasol are domestic synthetic fatty alcohol producers, with Shell using an ethylene route and Sasol’s chemistry largely based upon natural gas feedstock.

Fatty alcohol importers include Kao of Japan, Ecogreen and KLK.

Procter & Gamble is a multi-national company and is the largest global fatty alcohol producer, with facilities in Asia and the US. The company produces domestically as well as serving as a major importer.

Detergent range C12-14 natural and synthetic fatty alcohols, also referred to as mid-cuts, dominate the fatty alcohol market because the main end-use for these alcohols is the huge surfactant (surface active substance) sector that includes household cleaners, washing detergents, and numerous industrial detergent applications.

($1 = € 0.75)

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By: Judith Taylor
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