Surfactant firms see price hikes on high oleochemical costs

28 January 2011 02:14  [Source: ICIS news]

ORLANDO (ICIS)--Surfactant producers Cognis and Evonik Goldschmidt expect to see further price hikes in the US and Europe in the next six months as fatty alcohol and fatty acid prices continue to soar, company officials said on Thursday.

Surfactants are major chemical ingredients for detergent and other cleaning products.

Consumer product companies are slower to react in passing on product price increases to consumers, which put surfactant manufacturers in a tight squeeze, said Steve Turner, director, household care at Evonik Goldschmidt, on the sidelines of the American Cleaning Institute (ACI) annual meeting in Orlando, Florida.

“Fats and oils prices have gone up by 50-60% in the last three months, which are unsustainable. There is no doubt surfactant producers have to pass on these price increases,” added Turner.

According to Evonik, most of their raw material feedstock are based on oleochemicals that uses animal fats.

Cognis, which is now part of BASF, is also a major animal fats and palm kernel oil consumer. The company still produces and markets fatty alcohols in Europe and the US, said Dirk Bungel, vice president at Cognis North America.

“Being vertically integrated into fatty alcohol production is an added leverage at times like these but there is no doubt that with such high fats and oils prices, there is a need to pass on these increases,” said Bungel.

In the US, bleachable fancy tallow (BFT) prices hit 49.50 cents/lb ($1,091/tonne, €797/tonne) in the Chicago cash market on Wednesday, up from 27 cents/lb at the same time last year and more than 1 cent/lb higher from the prior week, according to ICIS.

In Europe, tallow prices reached record highs with €800-850/tonne FD (free delivered) NWE (northwest Europe) in Germany and €750-800/tonne in France and Italy.

Crude palm kernel oil, meanwhile, rose to Malaysian Ringgit (M$)405 per pikul (close to $2,200/tonne) FOB (free on board) Malaysia on Tuesday, sending shock waves into the industry as prices had reached yet another historical high, reported ICIS.

Crude coconut oil values also touched $2,260/tonne CIF (cost, insurance and freight) Rotterdam on Tuesday.

The ACI meeting ends Saturday.

($1 = €0.73)

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By: Doris de Guzman
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