LAB Prices Face Decline in US and European Markets Amid Diminishing Demand and Excess Supply

In November 2023, the global Linear Alkyl Benzene (LAB) market encountered a decline trend primarily driven by a decrease in its feedstock, Benzene, correlated with a fall in Crude oil prices. Further, weakened demand in the downstream surfactant industry impacted market challenges and contributed to a reduction in LAB costs. In the United States, LAB prices dropped due to an abundant supply, and European nations faced a similar difficulty amid unfavorable market conditions. The overall market situation was influenced by various factors, including lower feedstock costs, ongoing inflation, geopolitical tensions, and increased interest rates, collectively affecting consumer purchasing sentiments.

This month, the price of detergent-grade LAB in the United States witnessed a 2% decline, primarily attributed to the reduced costs of the feedstock Benzene, which experienced a 12% depreciation. This drop in Benzene prices was linked to the overall decline in crude oil prices, driven by an increased stock. The winter season in the domestic market contributed to lackluster demand for LAB, further heightened by elevated inventories. In overseas markets, Europe and Asia experienced sluggish demand for LAB from downstream industries, influenced by economic slowdowns and persistent inflation in those regions. Furthermore, the supply disruptions caused by shipping restrictions on the Panama Canal affected the market, leading to increased stocks. In response to these factors, market participants opted to lower prices, reflecting the challenges posed by decreased feedstock costs, seasonal demand patterns, and global economic conditions.

In Europe, prices for LAB experienced a 1% decline, primarily attributed to reduced costs of the feedstock Benzene and diminished demand from the downstream surfactant industry. The drop in feedstock Benzene prices, influenced by the overall decrease in upstream Crude oil prices, eased production costs. The LAB market faced subdued demand, reflecting challenging economic conditions and a slowdown in purchasing activities. The increased uncertainty stemming from tensions in the Middle East further prompted businesses and households to adopt a cautious approach.

According to ChemAnalyst, the global LAB market is projected to continue facing challenges in December 2023 due to subdued demand globally and the easing of feedstock Benzene costs. Despite the current gloomy market conditions, there is anticipation for a potential rebound in demand from the downstream surfactant industry in January and February 2024, which could lead to an increase in LAB prices in both the US and European regions. Moreover, there is a forecasted rise in feedstock Benzene costs in the upcoming months, which might exert additional cost pressures on the product. This increase in costs could contribute to a surge in LAB prices. Therefore, the market is anticipated to undergo fluctuations shortly, influenced by factors such as demand trends, feedstock costs, and overall economic conditions.