Europe Q4 fatty alcohols roll over from previous quarter

06 November 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--Mid-cut fatty alcohol prices for the fourth quarter have remained at third-quarter levels, sources said on Wednesday.

After lengthy discussions between buyers and suppliers, fourth-quarter contracts settled at €1,250-1,400/tonne ($1,689-1,892/tonne) FD (free delivered) NWE (northwest Europe).

It is thought that those buyers who concluded their business earlier paid towards the higher end of the range, whereas those who delayed negotiations were able to purchase material towards the lower end.

A shortage of mid-cut fatty alcohols in Europe had raised producer hopes for increased prices, with one previously stating it would offer between €1,450-1,500/tonne.

However, the healthy consumption seen in China eventually fizzled out, leaving Asian producers with extra material to offer into the European market.

This led to strong downward pressure being placed on prices, and producers stated they were unable to achieve the increases they had previously hoped for.

A wide disparity between buyer and seller ideals thereafter continued to delay fourth-quarter negotiations, and with extra capacity coming on stream in southeast Asia, many buyers held back from the negotiation process in the hope of achieving lower fatty alcohol prices.

Others opted to cover their requirements on monthly contracts, as they remain confident that prices will fall over the coming months.

One buyer said it has not purchased as much as it usually would as it expects prices could come down further in December.

The buyer expects extra fatty alcohols to arrive from Asia in December, placing further downward pressure on prices.

“I will purchase further volumes during December if need be,” it said.  

($1 = €0.74)

By: Neha Popat
+44 208 652 3214

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