Differing price ideas stall Europe Q3 fatty alcohols discussions

18 June 2014 23:59 Source:ICIS News

LONDON (ICIS)--A wide spread between buyers’ and sellers’ pricing ideas in the European fatty alcohols market is currently stalling the third-quarter negotiation process, sources said on Wednesday.

Many buyers continue to hold back from negotiations in the hope of securing fatty alcohols for a lower price.

Although buyers are hopeful for mid-cut fatty alcohol prices at €1,400/tonne FD (free delivered) NWE (northwest Europe), one producer noted this was unrealistic given the current feedstock price level.

The producer said it was currently making offers at €1,600-1,675/tonne FD NWE, and would not be willing to offer anything significantly lower than this if feedstock prices remain at these levels.

“If we were to [lower offers] it would only be by €25-50/tonne,” it said.

The producer added that with fatty alcohol plants in Asia currently down, it did not expect there to be a great availability of material in Europe during the third quarter .

Feedstock palm kernel oil (PKO) values edged up slightly this week, although have generally been trading lower than previously.

One trader also noted that buyers were not currently in a rush to finalise their negotiations, and believed many were waiting for PKO prices to stabilise before they committed to a third-quarter price.

By Neha Popat