SE Asia LAB stable as buyers stay back expecting softer prices

SINGAPORE (ICIS)–Asia spot import prices of linear alkyl benzene (LAB) were steady this week as buyers stayed away hoping the values will fall in tandem with weaker crude, market sources said on Friday.

Based on ICIS data, import prices were $1,150-1,200/tonne CFR (cost and freight) SE Asia on 20 April, same as the week before.

This bucked earlier anticipations that prices will move steadily up in the April to June period, on a seasonal uptick in demand as well as a tight supply.

Several northeast (NE) Asian sellers said they had received very active enquiries from regional end-users for supplies available to ship in April and May.

However, actual transactions were limited during the week as buyers held back lest LAB prices soften further with a weaker crude.

On 15 April, Brent crude for June delivery lost more than 3% overnight to close at $41.28/bbl, on OPEC disagreement on a proposed output cap.   

As crude prices has since steadily recovered on the back of a firmer US currency, LAB sellers are now hopeful that buyers “will return” to secure cargoes, and that a tight supply will keep prices on a stable uptrend.

Their target selling price was $1,200/tonne CFR southeast (SE) Asia, so as to recover margins squeezed by high feedstock costs.

Workable buying ideas were hovering around $1,150/tonne CFR SE Asia now, but markets sources said that “bids will have to improve” as spot availabilities are limited with most NE Asian plants still not running at full capacity partly due to feedstock normal-paraffin shortages resulting from maintenance shutdowns at several regional normal-paraffin plants.