Players in the European fatty alcohols markets are postponing discussions on Q4 contracts, amid spikes in feedstock and high spot prices, a producing source said on 31 August.
Spot levels for C12-14 fatty alcohols in Europe remain above €1,800/tonne, the source said.
A strong rally in feedstock palm kernel oil (PKO) prices has been noted as the main driver behind these hikes.
The source also said it “expects further increases during September for Q4”, echoing recent comments by other players which pointed to the possibility of spot prices going above €2,000/tonne.
Negotiations for Q4 contracts have yet to begin for many participants. The producer said it had postponed discussions until the end of September. Though the consensus in the market points to likely increases in Q4, many in the market are thought to be taking a “wait-and-see” stance, in order to monitor trends in feedstock costs, their impact on global prices and how this will translate into the European market.
The prevalence of hand-to-mouth buying seen as a response to rising costs is expected to continue. Otherwise supply and demand fundamentals in Europe remain stable, the producer confirmed. The source added that “for September supply we see some pick-up [in] volumes” but it is yet unclear whether this will prevail in Q4.