Fatty Alcohol Prices Surge Amidst High Demand and Limited Palm Oil Supplies

Hamburg (Germany): The prices of Fatty Alcohol have been rising across the regional market. Market sources highlight a notable increase in demand from the downstream Personal Care industries in Asia, driving this upward price trend. The surge in demand has exerted substantial pressure on Fatty Alcohol prices, propelling them higher. Adding to this trend, the recent spikes in Palm Oil prices have further intensified manufacturing costs for Fatty Alcohol, contributing to the sustained buoyancy in prices. However, in contrast to this, European markets are facing challenges with soaring Fatty Alcohol prices. This increase is attributed to a combination of inflationary pressures and low operational rates in the region, creating a challenging environment for buyers and industries dependent on Fatty Alcohol.

The ChemAnalyst database has shown that the prices of Fatty Alcohol have demonstrated an inclination of USD 90 per ton in the domestic market of China in the week ending 19th April. China has witnessed a substantial uptick in demand for Fatty Alcohol, further propelling the price surge. The country's active economic growth has boosted demand in the Personal Care sector, contributing to the regional price hike. The Chinese economy has started the year on a strong note, maintaining a robust recovery momentum. This positive trend is attributed to the effectiveness of the country's macroeconomic policies. Furthermore, recent export data from Malaysia and Indonesia indicates a significant surge in Fatty Alcohol demand in March, coupled with dwindling Palm Oil inventories. However, cautious trading persists as major buyers in India and China pivot towards sunflower oil and soybean oil, tempering bullish signals from the region.

On the other hand, despite Malaysia's Palm Oil inventories hitting a 10-month low on April 15, global vegetable oil production updates have soured trade sentiment. The revision of upward estimates for Brazilian soybean production in 2023 has further added to market uncertainty. Furthermore, according to the Malaysian Palm Oil Board, Malaysia raised its April crude palm oil (CPO) reference price to 3,958.58 ringgit per ton, while keeping the export tax rate at 8%, which could further lead to an increase in the manufacturing costs of downstream derivatives, including Fatty Alcohol.

According to pricing intelligence from ChemAnalyst, a continued rise in Fatty Alcohol prices in the coming weeks is anticipated, driven by strong demand from the Personal Care industry and escalating Palm Oil costs. In addition, market players expect Fatty Alcohol demand normalization to drive improvements in volume production and pricing, with current trends suggesting a demand recovery in the second quarter.