Europe Q3 mid-cut fatty alcohols prices increase on tight supply

24 July 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--Mid-cut fatty alcohol prices for the third quarter have significantly increased from second-quarter levels, with a shortage of material pushing prices higher, sources said on Wednesday.

Third-quarter contracts settled at €1,250-1,400/tonne ($1,645-1,842/tonne) FD (free delivered) NWE (northwest Europe), an increase of €120-150/tonne from the second quarter.

Many buyers were previously hopeful there would be further price declines with extra capacity coming on stream, which led many to hold back from the negotiation process.

However, this has yet to occur in Europe and prices have instead climbed higher.

This has led to a wide price spread for third-quarter material, with those buyers delaying negotiations paying towards the higher end of the scale.

One buyer said it found “difficulty” in securing its required volumes for the third quarter.

With a significant shortage of material in China owing to ongoing plant shutdowns, buyers in the country continue to pay higher prices for mid-cut material, leading to less being sent to Europe.

The delay to Wilmar International’s fatty alcohols plant in Rotterdam, the Netherlands, has also tightened availability of material.

With prices in Asia remaining at high levels, upward pressure continues to be placed on fatty alcohol prices in Europe.

“I don’t expect prices to decline during the third quarter; only during the fourth quarter at the earliest,” one supplier said.

Market participants state increasing numbers of buyers opting to secure material on a hand-to-mouth basis, with many convinced that mid-cut prices will decline during the coming months.

($1 = €0.76)

By: Neha Popat
+44 208 652 3214

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