US Q1 mid-cut fatty alcohol contracts fall sharply

Source: ICIS News

2019/01/11

HOUSTON (ICIS)--US C12-15 mid-cut fatty alcohol Q1 contracts were assessed down, on ample supply in natural alcohols and up/down feedstock prices.

The Q1 mid-cut fatty alcohol contract range was assessed at 71-79 cents/lb ($1,565-1,742/tonne), bulk delivered basis, shedding 9 cents/lb from the low end of the Q4 range and 10 cents/lb from the high end.

Natural alcohol common low-end prices were at 70-71 cents/lb, but there were several contracts settled below the 70 cents/lb mark – bulk delivered - confirmed by buyers and sellers.

Buyers and sellers said the up/down fluctuations on feedstock palm kernel oil (PKO) prices during the latter half of the fourth quarter discouraged purchases.

Additionally, the US market was not affected by any fatty alcohol supply curtailment in the Asian natural alcohols. US buyers were confident in obtaining requirements for the first quarter.

Synthetic alcohols are tight in the US market. This factor upheld both the low and high ends of the C12-15 first quarter assessment for the US alcohols.

In the natural alcohols, some Q1 alcohol contracts were confirmed below 70 cents/lb, putting downward pressure on the low end of the spread.

In the US, sellers’ offers are done on an account-by-account basis rather than announced price changes.

This has become the normal procedure for these alcohols in the US market.

Synthetic alcohol supply remains short and inventories are routinely in sold-out conditions. These factors can support some gains for synthetics that use quarterly contracts, where natural alcohol prices can vary from synthetics. The ICIS range seeks to address both natural and synthetic, with natural alcohol prices more prevalent in the assessment.

Synthetic alcohols are an important production and demand sector for the mid-cut C12-15 alcohols, with the ’15 on the carbon chain to denote that the ICIS range seeks to include synthetic prices with the natural alcohols, which are always a C12-14 or C12-16.

Natural fatty alcohols are typically made by an oleochemical process using PKO or coconut oil (CNO) as feedstock. Synthetic alcohols are the same fatty alcohol molecule but produced by processes using ethylene as feedstock.

The key end-use for mid-cut alcohols is surfactants, which comprise numerous cleaning and detergent applications, ranging from household cleaning agents to oilfield applications.

The following graph shows price direction for the C12-15 mid-cut alcohol contracts.

ICIS Editorial Chart goes here

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