LABSA Prices Surge in the United States and Europe in August 2023 Amidst Rising Feedstock Costs

In August 2023, there was an increase in the prices of Linear Alkyl Benzene Sulphonic Acid (LABSA) in both the United States and Europe. This surge in the product cost can primarily be attributed to a surge in demand and the rising costs of its feedstock, Benzene, and Sulphuric Acid. Further, disruptions in LABSA supply occurred due to delays in the Panama Canal due to low water levels, which has affected the US market. In Europe, LABSA prices also rose due to increased demand from the downstream surfactant industry, and the product inquiries have been robust from the Asian market, which has increased the imported product demand and thus kept the prices high in the region.

Throughout August 2023, the LABSA market in the USA experienced a significant 1% rise in FOB Louisiana prices. This upward price trend was driven by a significant increase in demand, particularly from downstream surfactant sectors, which was supported by a moderate supply of LABSA products. Furthermore, the cost of the feedstock Benzene showed an upward trend due to rising upstream Naphtha prices in the USA caused by inclining Crude oil costs due to OPEC+ production cuts. Another feedstock, Sulphuric acid, also saw price increments due to rising import costs of Sulphur, disruptions in the supply chain due to hurricanes in the region, and an increase in upstream Crude Oil prices. Demand from overseas markets, particularly Asia, particularly China and India, amid the coming festival season, has contributed to the rise in LABSA prices in the USA. Additionally, supply disruptions occurred in August due to the hurricane season and Panama Canal backlogs due to reduced water levels, affecting the LABSA supply chain in the US.

In Germany, LABSA prices increased by 3% on a monthly basis in August 2023 due to heightened demand from the surfactant industry. The feedstock Benzene and Sulphuric acid prices also rose due to strong domestic market demand, and the increasing upstream Naphtha prices led to higher production costs for LABSA, further supporting the price trend in Europe. Several factors contributed to market instability in Europe, including volatility in the upstream crude oil market, rising freight rates impacting exports, and uncertainty in the overall economic outlook.

According to ChemAnalyst, LABSA prices are expected to continue rising in September and October in both the US and Europe. This is due to anticipated increases in feedstock Benzene prices driven by rising Crude oil prices. Additionally, increased demand from downstream sectors is expected in the coming months as economic conditions may improve, potentially affecting consumer sentiment in the region. Furthermore, sustained overseas demand from Asian countries, particularly China and India, is expected to keep LABSA prices high.