Production Cuts and Rising Energy Costs Drive German Detergent Alcohol Prices on the Higher End

Hamburg, Germany: The prices of Detergent Alcohol have gained upward momentum at the start of the fourth quarter of 2023. The manufacturers have been raising the prices of finished goods employed in the Personal Care sector amid lower production rates of the operating firms in the previous quarters. In addition, the economic turmoil infused by the fallout between Israel and Palestine has impacted the prices of Natural Gas in the European market. Following Russia's invasion of Ukraine, Germany sought to reduce its dependence on Russian gas and turned to Qatar as a notable LNG exporter. Concerns about Qatar's alleged support for the Palestinian militant group Hamas have exacerbated the market concerns.

The ChemAnalyst database has shown that the prices of Detergent Alcohol have increased to USD 50 per ton in the week ending 06th October. The inquiries from the downstream Personal Care sector have remained average, as reported by market participants. As per the data released by the Federal Statistics Office, Industrial production fell slightly more than expected in August by 0.2% compared to July 2023. Furthermore, In July, one of the leading manufacturers of Detergent Alcohol, Wilmar, declared force majeure on Detergent alcohol at their Rozenburg plant in Rotterdam, the Netherlands, which has an annual capacity of 120,000 metric tons. The force majeure is still in effect, and a restart is not anticipated until at least November, which is likely to impart supply-side pressure on the market fundamentals of Detergent Alcohol.

On the other hand, the prices of Detergent Alcohol have witnessed a contrary trend in the Malaysian market. According to the Malaysian Palm Oil Board, Malaysia's palm oil stockpiles hit an 11-month high at the end of September, rising 9.6% from August to 2.31 million metric tons, marking the fifth consecutive month of increases in the world's second-largest palm oil producer. The accumulation of upstream Palm Oil stocks has prompted downward pressure on the price realization of Detergent Alcohol. In addition, as per the market sources, Malaysia's trade fell from RM1.869 trillion in January-August 2022 to RM1.718 trillion in the same period in 2023, primarily due to depreciation in commodity sectors such as palm oil and petroleum, supporting the bearish Detergent Alcohol market sentiments.

According to ChemAnalyst, the prices of Detergent Alcohol might gain upward momentum in the European market. However, the rebound in the demand from the downstream Personal Care sector is not expected to materialize soon. Thus, the Detergent Alcohol price trends will likely be driven by high Natural Gas costs amid the upcoming winter season. In addition, the Asian Detergent Alcohol markets are also anticipated to demonstrate bullish market sentiments amidst festivities in India and recovering demand from Thailand and other southeast nations.