OUTLOOK ’14: US fatty alcohol price sentiment remains flat

27 December 2013 17:00 Source:ICIS News

HOUSTON (ICIS)--Price sentiment for US fatty alcohols going into 2014 remains largely flat, with routine demand and growing Asian supply underpinning that perspective.

As a significant net importer of natural fatty alcohols, US buyers look to the Asian feedstock and production region as the major source for these alcohol cuts, mainly C16-18 blended material.

The C16-18, or heavy-chain, alcohols go into end-use segments such as cosmetics and personal care.

While these end-use applications are highly regarded and desirable to US consumers, demand for them has been routine in 2013 and is expected to remain so in 2014.

Large buyers looking at contract price negotiations for the first quarter of 2014 commented on having sufficient inventory to meet demand, with some buyers mentioning rail car volumes on hand ahead of the contracting sessions. 

Heavy-chain alcohol contract prices have maintained a flat scale in 2013 after dropping significantly at mid-year.

Mid-cut detergent range C12-15 alcohols carry similarly routine price sentiment for 2014, although this alcohol chain experienced a price lift from mid-year 2013 driven by upticks in oilfield surfactant applications.

With Q1 2014 contracts completing at the end of December, most market participants discussed a rollover for the mid-cut alcohols from Q4 2013.

This expectation was driven partly by lower-based accounts moving up in price but remaining within the overall 86-99 cents/lb ($1,896-2,183/tonne) fourth-quarter contract spread.

Another contributing factor in the mid-cuts is that the US does not rely heavily upon imports because there are two large domestic synthetic producers of this alcohol tier, Shell, via an ethylene route, and Sasol via gas-to-liquids (GTL).

California regulations worth notice
Looking ahead in US surfactants and other fatty alcohol applications, the state of California is considering engaging environmental directives that sources at the American Cleaning Institute (ACI) say could be costly.

California is expanding into new regulatory rules on chemicals that go into consumer products, with potential reformulations heading up the section that could add cost to the products, said a senior director for environmental safety for the ACI.

The source said the official release of the regulations took place in October, with the regulations now entering the implementation format.

Products likely to be among the first examined by the California regulator compliance group include personal care items such as shampoos, child-specific items and cleaning supplies.

Personal care items and shampoos are end-use applications for heavy-chain and mid-cut fatty alcohols, while cleaning supplies form a backbone of surfactant applications for the mid-cut alcohols.

By Judith Taylor