US fatty alcohol Q3 contract talks underway amid firmer markets

12 June 2013 21:19  [Source: ICIS news]

HOUSTON (ICIS)--A slightly firmer US market perspective in the mid-cut C12-14 to C12-16 alcohols has some buyers talking a Q3 rollover and several sellers aiming for a price increase, market sources said on Wednesday.

Buyer perspectives in late May focused on ease in securing material. However, the slightly firmer market has led several sellers to push for an increase in prices heading into the third quarter.

One supplier said it was definitely seeking to raise prices because mid-cut alcohol inventories in Asia are snug after various production units had Q1 and Q2 downtime. 

Mid-cut alcohol contracts were last assessed at 83.00-95.00 cents/lb ($1,830-2,094/tonne, €1,373-1,571/tonne) bulk delivered.

Amongst other fatty alcohols, market participants in the heavy-chain C16-18 alcohols continue to have lower price sentiment and expectations that Q3 contracts could slip under Q2 levels.

US contracts for C16-18 alcohols were assessed at 81.00-93.00 cents/lb on a bulk delivered basis for the second quarter.

US buyers continue to keep a careful watch on domestic demand, maintaining narrow finished goods inventories and monitoring alcohol purchase volumes accordingly.

US demand is described as routine in C16-18 key end-uses such as personal care, while boosted oilfield applications for surfactants are bolstering demand for the mid-cut alcohols.  

The US is a net importer of fatty alcohols, as most natural alcohol production is from palm kernel oil feedstock and most producers are located in Asia.

Shell and Sasol produce detergent range alcohols by synthetic processes in the US, respectively utilising ethylene and gas-to-liquids chemical routes.

($1 = €0.75)

By: Judith Taylor
+1 713 525 2653

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