Anti-dumping regulations concern European fatty alcohol buyers

07 April 2011 17:08  [Source: ICIS news]

LONDON (ICIS)--European fatty alcohol buyers remain hesitant on settling contracts for the second quarter amid concerns over the forthcoming decision on anti-dumping regulations in the continent, market participants said on Thursday.

With the European Commission due to make a decision on whether to impose anti-dumping duties on imports from India, Malaysia and Indonesia in mid-May, many buyers are reluctant to agree contracts in light of the additional charges that could be imposed on material being shipped into Europe.

Although it remains unclear at this stage how much duty would be imposed, many sources said that exporters were becoming increasingly wary of underselling their European competitors and were including clauses in contracts drawn up to reflect an increase in prices should the law come into effect next month.

Prices of all grades of fatty alcohols have maintained elevated levels towards the end of the first quarter in Europe, in line with the rising cost of palm-based feedstock material.

Bursa Malaysia crude palm oil hit an all time high of ringgit (M$) 3,643/tonne (€839/tonne, $1,199/tonne) during the week ending 11 March.

Despite feedstock prices marking a sharp decline from these levels in recent weeks, prices of fatty alcohol prices have remained high. Mid-cut material was quoted between €2,700-2,800/tonne FD (free delivered) NWE (northwest Europe) in the week ending 8 April.

Traders said that some buyers had reluctantly settled their contracts for the second quarter within this range; however, the majority remain concerned that any additional duty passed onto them would make it virtually impossible to maintain reasonable profits.

One buyer opted to purchase less mid-cut material than normal. “It is more cost effective for me to limit the amount of stocks produced from my plant than pay these prices,” he said.

European producers of fatty alcohols maintain, however, that goods currently imported into the continent at a much lower price than are sold in the exporters home country creates an unfair advantage for the foreign manufacturers.

Market participants remain unclear over how long the high prices for all grades of fatty alcohol material in Europe will remain, although many believe the longer that buyers continue to gamble on the market by covering on a hand-to-mouth basis, the longer the upward pressure on prices will be exerted.

($1 = €0.70) (€1 = M$4.34)


By: Neha Popat
+44 208 652 3214



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