Europe fatty alcohol buyers hopeful for further price declines

08 May 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European fatty alcohol buyers remain hopeful for a further decline in prices, despite a lack of activity being demonstrated in the market at present, sources said on Wednesday.

Spot trades of mid-cut alcohols were reported at €1,130-1,150/tonne ex-tank Rotterdam this week, within the range where the majority of second-quarter contracts previously settled.

With vessels scheduled to arrive in Europe at the end of May and in early June, one buyer expects this extra material to pressure fatty alcohol prices towards the end of the quarter.

Furthermore, with the May ethylene contract settling down by €100/tonne ($132/tonne) from the previous month and leading to a reduction in the synthetic alcohol price, many buyers remain optimistic that this will keep pressure on prices of the naturally-based alternative. 

Feedstock palm kernel oil (PKO) costs continue to rise week on week, leaving fatty alcohol producers adamant that they will not be lowering the offers they currently make in the market.

PKO traded at $771/tonne DEL (delivered) south Malaysia, up $10/tonne from last week.

Many participants do not expect a significant change to pricing until third-quarter negotiations pick up at the beginning of June at the earliest.

($1 = €0.76)

By: Neha Popat
+44 208 652 3214

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