During the week of 16 May, FAE 7,9 import prices were assessed down $30/tonne week on week at $1,550-1,650/tonne CIF (cost, insurance & freight) SE (southeast) Asia; and stable at $1,550-1,650/tonne CIF China according to ICIS data.
Over a four-month period from mid-January, regional spot prices fell by around 9-11%, the data showed.
FAE spot values have largely been tracking the decline in C12-14 fatty alcohol markets.
Continued weakness in C12-14 alcohol markets and upstream palm kernel oil (PKO) could further drive FAE spot prices lower, industry players said.
C12-14 fatty alcohol spot prices have reached the lowest levels in more than two years, and were assessed at an average of $1,425/tonne FOB (free on board) SE Asia on 16 May, ICIS data showed.
There is usually a lag time for feedstock movements to show up, meaning FAE markets are still under pressure, market sources said.
As a result, some producers preferred to sell their drummed cargoes locally for better netbacks where possible.
“I am not paying too much attention to the export markets for now. It is still more lucrative to sell to domestic buyers, especially since local sentiment weakened by a relatively smaller extent,” a seller in northeast Asia said.
With the ongoing Muslim fasting month of Ramadan, there are expectations of a demand lull in some parts of southeast Asia. Some buyers in the region have adequately stocked up on cargoes ahead of Ramadan.
“Buying interest is not especially strong,” a trader said.
Some factors could counter the downtrend for C12-14 markets, such as strong ethylene oxide (EO) prices and recent FAE plant issues in the region, making industry players wary of the market.
EO prices in China climbed to their highest since mid-March 2017, at yuan (CNY) 10,800/tonne EXWH (ex-warehouse) in May as supply tightened on the back of plant turnarounds, according to data compiled by ICIS .
As for ethylene, prices in northeast Asia increased for the first time in five weeks, aided by a resurgence in China’s restocking activity, while prices in southeast Asia weakened amid ample supply in the week ended 18 May.
Separately, it remains to be seen whether FAE supply may be curtailed by some recent production issues, according to market sources.
FAE is a non-ionic surfactant often used in the manufacture of personal care and industrial cleaning products.
Focus article by Kheng Wee Loy
Picture: Soap bars. (Source: Monkey Business Images/REX/Shutterstock)