14 February 2011 06:29 [Source: ICIS news]
SINGAPORE (ICIS)--Prices of mid-cut C12-14 blended alcohols in Asia continue to set new historical highs amid further gains in values of the feedstock crude palm kernel oil (CPKO), according to ICIS data.
Mid-cut C12-14 blended alcohol values rose $50/tonne (€37) to $3,150-3,250/tonne FOB (free on board) SE (southeast) Asia on 9 February with trades largely captured within the range. While some offers were heard to be higher at $3,350-3,400/tonne FOB SE Asia, market participants dismissed offers at this level as unreflective of the broader market.
“Prices of C12-14 have been increasing since June 2010 and have not had a downward correction for the past year,” a Malaysian producer of fatty alcohol said.
“This is bad for the industry as prices have reached new historical highs that customers find difficult to accept,” the producer added.
According to data from ICIS, prices of mid-cut alcohols have risen by $1,750/tonne FOB SE Asia year on year since 9 February 2010.
Market players said that with prices of mid-cut fatty alcohols at current levels, buyers would eventually switch to cheaper alternatives.
Sellers have observed that some of their buyers have made a partial switch to synthetic alcohols.
Feedstock values have strengthened since June 2010 because of regional bad weather conditions, which reduced the yield of palm oil and its derivatives, one trader said.
Meanwhile, traders said the supply of CPKO was extremely tight in Malaysia and Indonesia as a result of heavy rains caused by La Nina.
“CPKO gained an average of $30/tonne week on week since the start of 2011 and that has fuelled weekly gains of mid-cut alcohols,” a Malaysian based trader said.
CPKO values were traded at $1,292/tonne FOB Malaysia on 9 February, an increase of $290/tonne FOB Malaysia from June 2010.
($1 = €0.74)
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