22 May 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--Firmer fatty alcohol offers in Europe have led many market participants to expect an increase in prices during third-quarter negotiations, sources said on Wednesday.
Sources said inventories are now at low levels in Europe and many expect producers will look to introduce price hikes based on the firmer fatty alcohol prices in Asia, as well as a lack of available material in Europe.
Steady palm feedstock costs of late had seen mid-cut fatty alcohol prices remain stable, at around €1,200-1,250/tonne (€1,538-1,603/tonne) FD (free delivered) NWE (northwest Europe).
However, one producer said it is now “close to selling out of mid-cut fatty alcohols throughout May and June.”
The producer added that it would now be offering mid-cuts “at €1,350/tonne ex-tank Rotterdam” as a result, an increase of €100/tonne from spot deals it concluded last week.
Although further material is soon scheduled to arrive into Europe, the producer said this material has already been sold and will do little to add to the low inventories.
There is currently little activity taking place within the spot market, but, with many buyers having covered only what is absolutely necessary, it is anticipated they will soon be enquiring for further volumes.
A buyer states it is also hearing higher offers from its suppliers, but does not believe there is currently adequate justification in the market to introduce price increases.
“There are no drivers in the market to justify this price hike,” one buyer said, “the suppliers are just being opportunistic,” he added.
($1 = €0.78)
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