Asian LAB market to stay under pressure in lull season

SINGAPORE (ICIS)–The Asian spot linear alkylbenzene (LAB) market is weak as a result of traditional lull season with buyers mainly holding back on their purchases, a trend likely to continue for weeks ahead.

In India, demand for imports was weak during the monsoon season, coupled with leftover stocks from previous months.

LAB is used almost wholly as an intermediate in the production of surfactant linear alkylbenzene sulphonate (LAS) whose main end market is the biodegradable detergents and other cleaners.

Interested buyers in India would have purchased from local producers on a need-to basis.

Local transactions were also done lower than listed prices as much of the market was still sitting on the sidelines.

India domestic prices in August were announced at Indian rupees (Rs)106/kg on a delivered (DEL) basis.

However, trades were concluded lower at (Rs)103-104/kg DEL, equivalent to $1,360-1,380/tonne CFR (cost & freight) India.

International offers to India were mainly around $1,360/tonne CFR India, lower by $10/tonne from the previous week, in a bid to attract buying interest, but to no avail.

ICIS data on 01 August showed the India assessment at $1,340-1,370/tonne CFR India.

Both domestic and international suppliers were unwilling to lower their prices any further on the overall strength of upstream crude and benzene values, citing squeezed margins.

The situation in southeast (SE) Asia was much like the one in India, with buyers mainly on the sidelines monitoring the market during the slow demand period.

“Demand is slow and I have sufficient stocks for now. When demand picks up in September, as per usual, I will look into purchasing [LAB],” said a southeast Asian trader.

Offers to the region were also revised lower at $1,360/tonne CFR SE Asia to attract buying interest, but these met with lacklustre response.

ICIS data on 01 August assessed southeast Asia at $1,340-1,370/tonne CFR SE Asia.

Focus article by Yuanlin Koh