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Global LABSA Prices Plunge Amid Gloomy Market Sentiments in November 2023
Global LABSA Prices Plunge Amid Gloomy Market Sentiments in November 2023

Global LABSA Prices Plunge Amid Gloomy Market Sentiments in November 2023

  • 13-Dec-2023 5:11 PM
  • Journalist: Nicholas Seifield

The global market for Linear Alkyl Benzene Sulphonic Acid (LABSA) experienced a decline in November 2023, primarily due to a decline in the price of its feedstock Benzene, which was closely tied to the decrease in Crude oil prices. Further, diminished demand in the downstream surfactant industry posed challenges to the market and influenced LABSA prices. In the United States, LABSA prices fell due to an oversupply, while European countries faced similar challenges amid unfavorable market conditions. The overall market dynamics were shaped by various factors, including lower costs of feedstocks, ongoing inflation, geopolitical tensions, and rising interest rates, collectively influencing consumer sentiments and contributing to a reduction in LABSA costs.

This month, there was an 8% decrease in the price of LABSA in the United States, primarily stemming from the reduced costs of its feedstock, Benzene, which saw a 12% depreciation, along with another feedstock, Sulphuric acid, experiencing a 1% decline. The decrease in Benzene prices was linked to the overall drop in Crude oil prices, driven by increased stocks. The winter season in the US market contributed to subdued demand for LABSA, heightened by higher inventories. In international markets, both Europe and Asia faced sluggish demand for LABSA from downstream industries, influenced by economic slowdowns and persistent inflation in those regions. Additionally, the market contended with supply disruptions due to shipping restrictions on the Panama Canal, leading to heightened inventories. In response to these challenges, market participants chose to reduce prices, reflecting the impact of a combination of decreased feedstock costs, seasonal demand patterns, and global economic conditions.

In Europe, LABSA prices saw a 1% decrease, primarily due to lower costs of the feedstock Benzene and reduced demand from the downstream surfactant industry. The decline in Benzene prices, influenced by the overall decrease in upstream Crude oil prices, alleviated production costs for LABSA. The market experienced weakened demand, reflecting challenging economic conditions and a slowdown in purchasing activities. The heightened uncertainty arising from tensions in the Middle East further encouraged businesses and households to adopt a cautious approach.

As per ChemAnalyst, the global LABSA market is expected to face challenges in December 2023 due to subdued global demand and anticipated drop in feedstock Benzene costs. Despite the current unfavorable market conditions, there is an expectation of a potential resurgence in demand from the downstream surfactant industry in January and February 2024, potentially leading to an upswing in LABSA prices in both the US and European countries. Additionally, there is a forecasted increase in feedstock Benzene costs in the coming months, which could exert additional cost pressures on the product. This rise in costs might contribute to an upsurge in LABSA prices. Consequently, the market is predicted to experience fluctuations in the near term, influenced by factors such as demand patterns, feedstock costs, and overall economic conditions.

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