Rising Raw Material Costs Propel German Ethoxylates Prices Upward

Hamburg, Germany: After demonstrating bearish market sentiments in the past two weeks, the prices of Ethoxylates have gained momentum in the German market. As per the market sources, US and global oil prices surged after reports emerged that Saudi Arabia is considering extending its production cuts into 2024, following a week-long slump. The rise in upstream crude oil prices has been reflected in the pricing dynamics of several petrochemicals, including ethanol. In addition, Germany's chemical industry has faced an extremely challenging business environment for the past few quarters, affecting the market performance of key raw materials, Ethoxylates. Electricity prices in Germany continue to be higher than in many other countries, which in turn increases the production costs of Ethoxylates.

The ChemAnalyst database has shown that the prices of Ethoxylates in Germany have demonstrated an increment of USD 30 per ton on the week ending 17th November compared to last week's prices. However, despite the improvement in Ethoxylate prices, the market players were cautious about a turnaround in procurement volumes from the downstream surfactant and detergent industries. However, last month, a drop in inflationary pressures was reported. According to the Federal Statistical Office data, the German consumer price inflation rate was confirmed at 3.8% year-on-year in October 2023, easing sharply from the previous month's 4.5%. The market players are optimistic that the successive reduction in inflation will likely ease the purchasing powers of the end-use industries and will strengthen the market fundamentals of Ethoxylates.

On the other hand, the market participants have reported that the CEO of one of the major manufacturers of surfactant products, Galaxy Surfactant, has stated that in India, the strong demand continues to hold up well, especially with the rising interest in premium product categories, contributing to growth. However, a slower pace for volume growth in the US, which might take a couple of quarters to pick up, is expected. Despite the economic uncertainty in Europe, there is optimism regarding the growth of demand for Surfactants, reinforcing the market fundamentals of upstream raw materials such as Fatty Alcohol, Ethoxylates, etc.

According to pricing intelligence, the prices of Ethoxylates might gain momentum in the regional market. The expected rise in Crude Oil prices is likely to pressure the manufacturing costs of Ethoxylates. In addition, the lower operating rate of the manufacturing firms in the past few quarters is likely to prompt upward pressure on the price realizations of Ethoxylates in the forthcoming weeks.