Global Fatty Alcohol Prices to Continue the Menacingly Upward Trail Amid Unsettling Feedstock Volati

Global Fatty Alcohol Prices to Continue the Menacingly Upward Trail Amid Unsettling Feedstock Volatility Fatty alcohol prices across the globe have remained on the higher trend since the third quarter of 2021 as the economies hit back after the pandemic spread in the previous months. October and November months have witnessed threateningly high prices in all the major regions of the world. As per the ChemAnalyst database, the respective C12-C14 fatty alcohol prices for the USA, Germany, and India, settled at USD 2610 (DEL), 3167 (FOB), and 2147 (CFR), on 3 rd December after registering price rise at the rate of 8%, 64%, and 22% from second quarter closing prices and a whopping 100%, 126%, and 35% from the prices recorded last year.

The price shocks across the global fatty alcohol markets this year have been stimulated by the extreme feedstock tightness and inexplicably rising other miscellaneous factors. The prices of Palm Oil, the key feedstock for the production of fatty alcohol, remained on the boiling edge due to supply tightness. Indonesia and Malaysia, which are accountable for over 85% of the global palm oil production, have been struggling to cater to the firm domestic and international demands due to uncommonly low production output in the 2021 peak harvest season from July to September. The Indonesian representative palm oil body Indonesia Palm Oil

Association (GAPKI) has declared the 2019 El Nino drought as the major culprit for the low plantations due to the abstained rainfalls and extended dry weather in the running year. Furthermore, the growth in the domestic biodiesel demand has also created a diversion in the palm oil supplies. On the other hand, the Malaysian palm oil output got impacted due to the shortage of foreign labour following the cross-border movement restrictions imposed in the country during the pandemic period.

Meanwhile, the recovering industrial activities have pushed the demand for fatty alcohol to greater numbers. Notably, the demand for C12-C14 fatty alcohol which is majorly used in detergents and hygiene goods is specifically taking higher strides on the back of resurging pandemic threat. The mounting demand in the oleochemicals downstream sectors have encouraged consistent fatty alcohol off takes in countries like India, China, the Netherlands, and the USA despite high freight charges due to the ongoing port container scarcity on ports. China, in particular, has enhanced its spot activity to boost the inventories amid the continued port congestion issue, thereby depriving the export volumes to other regions. The USA faced severe disruptions in the supply chains due to high freight rates and heavy damages to Louisiana ports incurred by Ida landfall that continued deterring the supply tightness in the country even in the fourth quarter.

Fatty alcohols are one of the major segments of oleochemicals that are extensively used for the production of surfactants that are distinctively used in domestic cleaning, personal care, lubricants, plasticizers, pharmaceutical formulation, and food and nutrition in the domestic and international end-user markets.

As per ChemAnalyst, the demand for fatty alcohols is expected to maintain robustness in the end-user sectors specifically in the manufacture of natural emulsifiers and surfactants due to the growing preference for naturally derived biodegradable compositions. The unresolved labour shortages and low palm oil productions will continue to uphold feedstock tightness in the fatty alcohol production chain. Temporary fluctuations in palm oil prices, as well as weak demand during the festive holidays, may provide a small respite to the fatty alcohol prices in some regions. However, the global picture is anticipated to vouch for the upward trend of

fatty alcohol prices in the starting quarter of 2022 amid the existing constraints and signs of feeble palm oil production next year over concerns towards rising Omicron variant and growing fertilizer prices.