25 May 2011 17:21 [Source: ICIS news]
By Serena Seng
Industry estimates suggest demand for detergents will account for 30% of capacity additions by 2013, and demand for surfactants another 30%, while new applications in plasticisers and polymers, among others, will make up the remaining 40%.
In addition, a correction in the fatty alcohols market since late March this year – particularly for mid-cuts – has encouraged buyers to be active in the market.
Prices reached a record high of $3,550/tonne FOB (free on board) SE
This spurred buyers to seek compensation for what they saw as “artificially inflated” prices and to push for price reductions.
To cope with the expected increase in demand, producers in the key export regions of
In 2010, those capacities were estimated at 460,000 tonnes/year in
They will include the start up of Singapore-based Wilmar International’s 100,000 tonne/year plant in
Outside Asia, Middle East petrochemicals major SABIC plans to build an 83,000 tonne/year plant in
The new capacities are expected to meet rising demand from the fast-developing economies of
In addition, the new plants will also be able to utilise ongoing demand from Europe and the
With more emphasis on the environment and a general shift towards products of plant origin, demand for natural fatty alcohols is expected to make up more than 65% of the total global share of detergents, surfactants and chemicals by 2013.
A gradual switch to natural fatty alcohols as feedstocks for plasticisers and polymers has been observed since April this year as oil prices have continued to rise.
Fatty alcohol producers in
These producers are optimistic that growth in the C12–14 blended and C16–18 blended alcohol sectors will remain strong, given the recovery in the textile, surfactant and cosmetics industries from the depths of the economic downturn.
However, analysts say the CPKO pricing trend remains unpredictable despite strong production yields in April and May, and prices could remain volatile and on the higher side.
Some industry players are bearish about the outlook, saying high CPKO prices are expected to weigh on sentiment and hinder the recovery and development of
However, others argue the expected strong production of crude palm oil in the second and third quarters of this year will help bring raw material prices down and bolster demand for fatty alcohols.
It is probably too early to determine whether the Asian fatty alcohol industry will be given the benefit of a significant demand boost.
This will depend largely on how the new capacities pan out during the next few years.
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