FocusStrong demand to fuel gains in southeast Asia soap noodles

24 February 2011 04:51  [Source: ICIS news]

Strong demand to fuel gains in southeast Asia soap noodlesBy Serena Seng

SINGAPORE (ICIS)--Southeast Asia’s 80/20 standard soap noodle prices may gain $30-50/tonne (€22-37/tonne) by end-February on the back of stronger demand and rising raw material prices, market sources said on Thursday.

Spot values of 80/20 blend soap noodle were assessed at $1,380-1,450/tonne FOB (free on board) SE Asia in the week ending 18 February, according to ICIS's first market report on the product.

Buying activity in the soap noodle market gained momentum after the Lunar New Year holidays in Asia early this month.

Bids and offers this week were generally higher at $1,430-1,480/tonne FOB SE Asia, but no deals had been located in this price range so far, market sources said.

“Buyers are returning to the market ahead of the summer season peak and are starting to discuss forward month cargoes with us,” said a Malaysian producer.

An Indonesian producer concurred, saying buyers “may be stocking up inventory now because prices are rising”.

Soap noodles are oleochemicals that go into production of soap bars.

Consumption of bar soaps traditionally peaks during the summer months - from June to September, said a Singapore-based trader.

“Bar soap manufacturers tend to purchase soap noodles from February to be in time to roll out the finished product - bar soap - in super market shelves by May so that commercial sales can begin,” the trader added.

Southeast Asia is the largest producer of palm oil-based soap noodles and their finished products that include laundry soaps.

The expected uptrend in soap noodle prices was also being backed by firm costs of feedstocks crude palm oil (CPO) and crude palm kernel oil (CPKO), market sources said.

CPKO was at $2,248/tonne FOB Malaysia and CPO was at Malaysian Ringgit (M$) 3,514/tonne ($1,148/tonne) during morning trade on 24 February.

($1 = €0.73 / $1 = M$3.06)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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By: Serena Seng

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