Asia stearic acid prices up $50/tonne on rising palm stearin costs

21 February 2011 07:30  [Source: ICIS news]

SINGAPORE (ICIS)--C18 stearic acid prices in Asia have risen on the back of rising feedstock palm stearin costs, market players said on Monday.

The prices of C18 triple-pressed stearic acid (TPSA) were assessed as $50/tonne higher week on week at $1,500–1,550/tonne (€1,095–1,132/tonne) FOB (free on board) southeast (SE) Asia on 16 February, ICIS data showed.

The prices of C18 rubber-grade stearic acid (RGSA) also rose by $50/tonne to settle at $1,400–1,500/tonne FOB SE Asia on 16 February, according to the data.

Meanwhile, domestically produced TPSA prices in China increased by yuan (CNY) 400–600/tonne ($61–91/tonne) to settle at CNY11,300–11,400/tonne ex-works, equivalent to $1,465–1,479/tonne after 17% value added tax, according to ICIS.

Traders attributed the hikes in both TPSA and RGSA prices to the current uptrend in raw material palm stearin costs.

Palm stearin February contracts were settled at $1,275/tonne FOB SE Asia, up by $60/tonne from January levels.

Palm stearin is a derivative of commodity crude palm oil (CPO) and its prices generally rise and fall in tandem with daily-traded CPO values.

However, sellers told ICIS that stearic acid demand had been weakening as the higher offers of TPSA and RGSA were keeping most buyers sidelined.

“Recently, we have [received] fewer orders for TPSA and RGSA, as buyers are not willing to book material at the current high prices,” a fatty acids producer in Malaysia said.

“I believe buyers will come back to book material when prices fall,” a Singapore-based trader said.

“But I think prices will remain firm until the next palm fruit harvest period is over in April,” the trader added.

($1 = €0.73, $1 = CNY6.57)

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By: Serena Seng

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