FocusAsia C14 myristic acid above $3,000/tonne on firm demand

05 April 2011 05:02  [Source: ICIS news]

By Serena Seng

SINGAPORE (ICIS)--Asia C14 myristic acid prices hovering at above $3,000/tonne (€2,100/tonne) are likely to remain firm, despite a tumble in feedstock prices, because of strong demand from the downstream cosmetic ingredient isopropyl myristate (IPM) sector, industry sources said on Tuesday.

Although feedstock crude palm oil (CPO) and crude palm kernel oil (CPKO) prices had fallen since the beginning of March, prices of C14 myristic acid had softened slightly.

CPO prices fell M$308/tonne ($102/tonne) from M$3,619/tonne on 2 March to M$3,311/tonne on 30 March, while CPKO prices fell $432/tonne from $2,188/tonne on 2 March to $1,752/tonne on 30 March.

This did not have a huge downward price correction as strong demand from downstream IPM sectors continued to keep prices trading at above $3,000/tonne FOB (free on board) SE (southeast) Asia.

Prices of C14 were traded at $3,100-3,300/tonne FOB SE Asia at the end of January, but fell $50-150/tonne to $3,050-3,150/tonne on 30 March. Prices are unlikely to fall below $3,000/tonne as market players are confident that the firm demand and tight supply will keep offers at above $3,000/tonne FOB SE Asia.

C14 myristic acid is used in the manufacture of IPM ester, an emollient and a light penetrator to carry ingredients deeper into the skin. Other traditional uses are as raw materials in the manufacture of cosmetics, soap and detergent.

“C14 acid is in tight supply and the strong demand from IPM ester, in addition to the other usual applications, are keeping prices rather firm,” a Malaysian producer said.

“Even though C12 lauric acid prices had dropped more than $500/tonne since last month, C14 prices still remain firm,” an Indian buyer said.

C12 lauric acid and C14 myristic acid are traditionally seen as a pair in a carbon chain as both are produced together when CPKO is fractionated.

“Typically, C14 prices are offered as a $100/tonne premium over C12 lauric acid. However, the gap is widening now as C12 lauric acid prices have already dropped to $2,600s/tonne levels,” an Indonesian producer added.

This trend is likely to continue in the next 2-3 weeks, regional producers said.

Prices of C14 myristic acid had dropped 8.9-10% or $300-350/tonne to settle at $3,050-3,150/tonne FOB SE Asia at the end of March. In February, prices hit a peak of $3,350-3,500/tonne FOB SE Asia.

Key producers of C14 include Acidchem, KLK, Pacific Oleo, Emery Oleo and Southern Acids in Malaysia, and Wilmar, Musim Mas, SOCI and Permata in Indonesia.

($1 = €0.70, $1= M$3.03))

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Serena Seng

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