29 September 2010 22:33 [Source: ICIS news]
HOUSTON (ICIS)--Short supply reigned in US fourth-quarter fatty alcohol contract negotiations, buyers said on Wednesday.
“It’s going up fast and suppliers will get most of it,” one natural fatty alcohol buyer said about price sentiment entering the fourth-quarter negotiations for the mid-cut detergent range C12-15 alcohols.
Fatty alcohol suppliers have mostly quit announcing price increases, electing to go to buyers on an account-by-account basis in most contract negotiations, buyers said.
Price increases up to 20 cents/lb ($441/tonne, €326/tonne) were said being sought by several suppliers even at medium and large volume accounts. But price hikes were varied within the market, with 10 cents/lb becoming a prevalent amount sought by importers and domestic suppliers, sources said.
Third-quarter contracts for C12-15 detergent range alcohols ranged 86-97 cents/lb, with supply constraints a dominating factor throughout the quarter, according to buyers.
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Selling directly into the oil market has become the better margin choice for suppliers, US sources said. This has allowed importers to pick and choose what global regions offer the best margin opportunity for alcohol sales and has allowed producers to press for higher contract prices, buyers said.
The supply situation was exacerbated in September when Asia’s Musim Mas alcohol production unit was shut down as a result of a rupture in its hydrogen generator, a
According to a release from Musim Mas, no alcohol production was expected for 4-6 months.
Alcohol production capacity at the unit was estimated by US sources to be approximately 125,000 tonnes/year.
Fatty alcohol importers include Kao of Japan, Ecogreen and KLK. Musim Mas imports and supplies to multi-national companies such as Procter & Gamble.
Procter & Gamble is a multi-national company and is the largest global fatty alcohol producer, with facilities in Asia and the
($1 = €0.74)
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