04 April 2011 05:28 [Source: ICIS news]
By Serena Seng
SINGAPORE (ICIS)--Asia C12 lauric acid prices may continue to soften on poor buying interest and amid falling values of feedstocks crude palm oil (CPO) and crude palm kernel oil (CPKO), market sources said on Monday.
Spot prices of C12 lauric acid shed $650/tonne (€455/tonne) or 20% from their peak on 23 February to $2,600-2,700/tonne FOB (free on board) SE (southeast) ?xml:namespace>
Poor market sentiment, combined with falling feedstock prices, caused C12 lauric acid prices to tumble in March, market sources said.
Prices were being adjusted, in line with the movement of crude prices, said a Malaysian fatty acids producer.
Meanwhile, most buyers have also covered some positions in early February, when prices were still on an uptrend, market sources said.
"C12 lauric prices were previously inflated to above $3,000/tonne FOB SE Asia levels. At that level, I did not buy as I know that was not the real market price," said an Indian buyer.
"When prices started to fall in [the] middle of March, I bought some cargoes as prices now are more realistic," a Japanese buyer said.
Strong availability of feedstock this month, as CPO and CPKO production goes on full swing, will likely keep the downward pressure on C12 lauric acid prices, market sources said.
"Most buyers are expected to hold out until prices drop even further in April," said an Indonesian producer, adding that the resulting weak demand will compound the pressure for C12 lauric acid prices to fall.
($1 = €0.70 / $1 = CNY6.55)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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