US detergent alcohol Q1 contracts fall on lower feedstock

10 January 2013 19:55  [Source: ICIS news]

HOUSTON (ICIS)--First-quarter US detergent alcohol contracts settled down from the fourth quarter, primarily driven by lower feedstock palm kernel oil (PKO) prices, buyers and sellers said on Thursday.

First-quarter contracts for natural and synthetic detergent-range alcohols in the mid-cut detergent range C12-15 group were assessed at 87-100 cents/lb ($1,918-2,205/tonne, €1,477-1698/tonne), shedding about 10 cents/lb across the spread from the fourth quarter. 

The main driver for reductions is lower-priced feedstock palm kernel oil (PKO) prices in Asia and attractively priced natural gas costs in the US.

PKO is the primary feedstock for natural alcohols. Natural gas is the base feedstock for synthetic production using either natural gas as a primary stock or using ethylene. 

PKO prices fluctuated mostly down during the fourth quarter of 2012 when feedstock for first quarter alcohols is largely utilised.

Natural fatty alcohol supply into the US is largely import-based, with a 30-60 day lag time between production of the finished alcohols and arrival at US tanks.

In synthetic alcohol production, US natural gas prices have moved down as the effects of the shale gas boom entered the market. 

Increasing alcohol supply in Asia also underpinned the price drop as several new plants have come on-stream over the past year.

Additionally, sources said that Chinese demand is down, pushing producers to actively seek the export market for off take.

US fatty alcohol demand is sustained, but exhibits a fairly routine pace entering 2013.  

Procter & Gamble, VVF, Wilmar, Kao and BASF are major natural fatty alcohol producers. Shell and Sasol produce alcohols by synthetic technologies.

Fatty alcohols are found in a wide range of end-uses, with surfactants forming the largest end-use sector for the mid-cut C12-14, C12-15 and C12-16 varieties of natural and synthetic production.

($1 = €0.77)
By: Judith Taylor
+1 713 525 2653



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