27 December 2010 07:47 [Source: ICIS news]
By Serena Seng
Availability of feedstocks crude palm oil (CPO) and crude kernel (CPKO), lauric oils and palm stearin may continue to pose problems, given expectations that palm plantation yields would be at the mercy of the La Nina weather pattern, characterised by prolonged rainy period.
Crude palm kernel oil (CPKO) more than doubled its price from the start of the year to $1,888/tonne (€1,435/tonne) FOB
The sharp increase was mirrored by fatty alcohol values, which soared to $2,950-3,050/tonne FOB SE Asia on 22 December from $1,360-1,400/tonne FOB SE (southeast) Asia on 6 January, according to ICIS data.
A brief respite in the tight feedstock conditions was possible in March-April, when the traditional harvesting period of palm fruit would be in full swing, industry sources.
Demand for oleochemicals, meanwhile, was expected to be firm next year, with regional sales growth estimated at 3-4% as consumption of cosmetics and plastics, particularly in
In the long-term, industry growth would be dependent on the adoption of environmentally-friendly chemical and the emergence of new applications.
Oleochemicals are used in making surfactants, soap and detergents, cosmetics and food emulsifiers. Their new applications driving growth are in the areas of biolubricants, green chemicals, bioplastics and biopolymers.
For C8 caprylic acid, demand was expected to remain strong in the first quarter amid tight supply as regional producers reduce the fractionation of this acid group, as complementary C10 capric acid, which is in abundant supply, is also produced during C8 fractionation.
C12 lauric acid and C14 myristic acid were also expected to enjoy firm demand, while demand for C18 triple pressed stearic acid may just be stable.
In the refined glycerine space, demand was projected to grow at 3-5% this year, based on industry estimates, with buying expected to peak after
Meanwhile, short supply of crude glycerine against strong demand may drive up its prices after the week-long festivities in
Meanwhile, the operating environment for players in the oleochemical industry, may be tougher going into next year, with petrochemical companies like Saudi Basic Industries Corp (SABIC) venturing into the lucrative business.
($1 = €0.76)
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