Price and market trends: Asian mid-cut fatty alcohols outlook uncertain as El Nino looms

26 May 2014 00:00 Source:ICIS Chemical Business

Mid-cut fatty alcohols price directions are mixed amid volatility in upstream and slower downstream demand, sources said on 14 May.

“Weaker economy situation in China might have resulted in weaker-than-expected demand from downstream applications such as alcohol ethoxysulfate (AES), used in consumer and household detergent, shampoos and foaming washes,” one northeast Asian trader said.

asia fatty alcoholsBids from buyers during the week ended 14 May were largely at $1,700-1,750/tonne FOB (free on board) SE (southeast) Asia. Several buyers expect prices to be weighed down by the slower buying activities and possibly higher-than-expected supply level.

However, the majority of the surveyed regional producers held firm to offers at $1,850/tonne FOB SE Asia. They claimed to be in sold-out position for May cargoes, with depleting June cargoes.

Furthermore, many were expecting upstream cost to be volatile with the threat of El Nino looming overhead, expecting to hit southeast Asia in the upcoming months.

The dry spell brought by El Nino, coupled with prolonged drought early in the year, will likely impact on upstream production, they added. If demand is unsupported prices will not hold up no matter how high the cost, one southeast Asian trader said.

By Alexis Gan