Asia oleic fatty acid prices rise on high demand, short supply

SINGAPORE (ICIS news)--Prices of C18 oleic fatty acid in Asia have increased as a result of supply shortages and increased downstream demand, regional traders said on Monday.

Prices of C18 oleic acid rose to $1,500-1,550/tonne FOB (free on board) southeast Asia on 19 May, up by $50-70/tonne (€40-56/tonne) from the previous week, according to global chemical market intelligence service ICIS pricing.

While prices of other fatty acid groups in Asia were relatively soft to stable, traders attributed the rise in C18 oleic acid prices to supply constraints, adding that a majority of fatty acid producers in Asia had sold out of their oleic acid inventories until the July-August period.

An increase in enquiries from Europe due to higher tallow prices had also put upward pressure on Asian oleic acid prices, traders added.

In addition, the BP oil spill in the Gulf of Mexico led to a sharp rise in demand for oleic acid, as it is one of the materials used to make dispersants – a key product that is being used in the clean-up of the massive oil spill, sources said.

“Oleic prices in Asia have more or less been impacted by the surge in demand in the US,” said a producer.

Besides being used to make dispersants, oleic acid is also used in the soap, lubricant, cosmetic and emulsifying industries.  

($1 = €0.80)