23 November 2010 21:38 [Source: ICIS news]
HOUSTON (ICIS)--Tight supplies were pushing up US fatty alcohol prices as first-quarter contract negotiations began, buyers said on Tuesday.
Tight supply was underpinned by an ongoing plant outage in Malaysia, where an October explosion was expected to keep production shut down for up to six months.
Buyers said at least two major importers verified they would not bring material into the US market in the first quarter.
One supplier exited the market as a result of more attractive options in nearby markets, especially China.
The other supplier sold out its material in the fourth-quarter and was taking extended plant maintenance in the first quarter of 2011, keeping its material out of the US as well.
Another import supplier was having cost and margin issues that were thwarting its ability to actively participate in the US market, sources said.
Fourth-quarter mid-cut detergent range alcohol prices were assessed at 99-120 cents/lb ($2,183-2,646/tonne, €1,594-1,932/tonne), up an average of 18 cents/lb from the previous assessment.
Several US buyers were already negotiating prices for first-quarter contracts with offers from suppliers at double digit increases from the fourth-quarter price levels.
No formal price announcements were made in the fourth quarter and none had emerged for the first quarter, buyers said.
Suppliers shifted preferences in moving prices on an account-by-account basis during 2009 due to the recession, sources said.
Naturals compete with synthetics in a number of situations, with an ongoing rivalry developing during 2010 caused by volatility in the natural alcohol prices, sources said.
US natural and synthetic alcohol buyers said the synthetics were competing strongly at the low-to-midpoints of the contract assessment.
Domestic US natural alcohol producers include Procter & Gamble and Emery Oleochemicals.
Shell and Sasol are domestic synthetic fatty alcohol producers. Fatty alcohols importers include Kao of Japan, Ecogreen and KLK among others.
Procter & Gamble is a multi-national company and is the largest single global fatty alcohol producer, with facilities in Asia and the US.
Mid-cut fatty alcohols are primarily used in household and industrial surfactants and detergents.
($1 = €0.73)
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