Some US Q3 fatty alcohol contracts roll over, others drop

13 July 2011 22:02  [Source: ICIS news]

HOUSTON (ICIS news)--Third-quarter US fatty alcohol contracts concluded with mixed settlement levels, with some rolling over and others falling - driven by shifting supply and demand factors, buyers and sellers said on Wednesday.  

Short-chain C8-10/11 natural and synthetic alcohol contracts completed largely at a rollover from the second quarter, maintaining an assessment of $1.05-$1.10/lb ($2,315-2,425/tonne, €1,644-1,722/tonne) for the third quarter.

Sources said improving alcohol supply was met by sluggish demand, keeping the short-chain at a neutral point.

Sluggish US demand for the short-chain alcohols was primarily derived from challenges in the housing and construction segment, a major end-use area for these alcohols.

In the huge mid-cut detergent range alcohol tier, natural and synthetic contract prices fell back 10 cents/lb on the high end of the second-quarter assessment, but the low end of the assessment remained steady.

Third-quarter contracts were assessed at $1.70-1.85/lb, compared with a second-quarter assessment of $1.70-1.95/lb.

Large and medium buyers said widely improving supply was the main driver for the price decreases achieved in the third-quarter contract negotiations.

Industrial and household surfactants form the primary demand drivers in the mid-cut C12-14/15/16 alcohols, with C12-14 and C12-16 representing the naturals and C12-15 a synthetic form.

US surfactant demand has remained strong throughout the first half of 2011.

Contract settlements in the long-chain blended fatty alcohol C16-18 category moved down in the large volume buying tier, but many medium-sized accounts were finished in a rollover.

Third-quarter C16-18 contracts were assessed in a narrow spread at $1.20-1.25/lb. The low end of the assessment was underpinned by rollovers in the medium-sized accounts, while large volume purchasing upheld the 5 cent/lb loss at the top end.

Domestic US natural fatty alcohol producers include Procter & Gamble and Cognis.

Shell Chemical and Sasol are synthetic fatty alcohol producers, using either ethylene or natural gas feedstocks.

Fatty alcohol importers to the US include Kao of Japan, Ecogreen and VVF.

The US is a net importer of all fatty alcohols.

($1 = €0.71)

By: Judith Taylor
+1 713 525 2653

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