27 October 2010 22:27 [Source: ICIS news]
HOUSTON (ICIS)--Fourth-quarter contracts for US fatty alcohols soared up on ongoing supply and feedstock issues, buyers and sellers said on Wednesday.
Fourth-quarter mid-cut detergent alcohols were assessed by ICIS at 99-120 cents/lb ($2,183-2,646/tonne, €1,572-1,905/tonne), up an average of 18 cents/lb on the overall spread. Mid-cut detergent alcohols include C12-14 natural, C12-15 natural and synthetic and C12-16 naturals,
In the C16-18 chain, referred to as heavy chain, fourth-quarter contracts were assessed at 81-89 cents/lb, a rise of about 8 cents/lb.
The contract price spike was said to be caused by rising feedstock crude palm kernel oil (CPKO) coupled with the exit of several oil importers in the US market.
CPKO November prices rose $63/tonne from October to $1,456/tonne FOB Malaysia this week.
Of six importers active in January 2010, at least three were said to have exited the US market due to feedstock oil prices comparing unfavourably with the importers’ ability to generate desired profit margins.
These issues were exacerbated by a plant explosion at one Malaysian location, taking additional fatty alcohol production out of the market for about four to six months, according to sources.
The combination of events has kept a severe supply crunch in the US since the second quarter, market players said.
Domestic US natural fatty alcohol producers include Procter & Gamble and Emery Oleochemicals.
Shell Chemical and Sasol are domestic synthetic fatty alcohol producers.
Fatty alcohol importers to the US include Kao of Japan, Ecogreen and KLK among others.
Procter & Gamble is a multi-national company and is the largest global fatty alcohol producer, with facilities in Asia and the US.
Mid-cut fatty alcohols are primarily used in household and industrial detergents and surfactants, while heavy chain alcohol end-uses are mainly in cosmetics and personal care applications.
($1 = €0.72)
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