As 2024 draws to a close, the global market for Alkyl Ether Sulfates (AES) is undergoing a significant shift. After months of price increases, AES prices have finally stabilized. This pause follows relentless upward pressure since September, primarily driven by an ongoing shortage of feedstock Fatty Alcohol, particularly in Southeast Asia. Despite the stillness in pricing, demand remains subdued due to off-season conditions, which have dampened market activity.

In North America, Health and Personal Care segment experienced a slight decline in November sales. However, year-over-year figures showed a positive growth. While consumer sentiment is upbeat as the holiday season approaches, consumer spending intentions in th AES market present a contrasting perspective. Despite increased optimism, consumers are holding back on spending. Confidence hasn't translated into higher spending across essential, discretionary, and semi-discretionary categories. Only specific items, such as toys, home decor, and home goods have seen slight upticks in spending intent. This suggests a cautious approach to festive spending.

On the supply side, AES availability in North America remains ample. However, suppliers are under pressure to destock inventories as the year-end approaches, signaling potential shifts in the market. Data from the Association of American Railroads shows a 2.2% decline in chemical railcar loadings as of mid-December, indicating that supply remains plentiful.

A similar trend in the AES market is emerging in European markets, where optimism does not equate to increased expenditure.

The supply landscape in Europe exhibits a similar trend, with ample AES availability amid unfavorable export conditions. Moderate market activity and pressure to maintain stable prices have caused most buyers to step back, preferring to keep quotations unchanged for December deliveries. Moreover, the movement of AES cargoes across key ports such as Hamburg, Rotterdam, and Antwerp has been slow, due to limited operations and maintenance, adding additional pressure on prices.

However, the outlook for production costs in the Asian AES market remains challenging. Rising feedstock Fatty Alcohol prices continue to push AES costs upward. The surge in production costs is linked to tight Palm Oil supplies in Southeast Asia. On November 19, 2024, the Malaysian Palm Oil Board raised export duties from 8% to 10%, driving up Fatty Acid prices and, in turn, AES production costs. Malaysia's palm oil stocks dropped by 2.6%, with production falling to its lowest level in years. Meanwhile, in Indonesia, speculations about higher export taxes, combined with increased domestic demand due to biodiesel mandates, are further driving up prices. Additionally, weather-related disruptions are expected to reduce palm oil output by up to 1 million tons, tightening supply chains and further escalating Fatty Alcohol production costs.

As per ChemAnalyst, the AES market faces mixed prospects in the coming weeks. While stabilized prices and ample supply in North America and Europe provide short-term relief, subdued demand and cautious spending intentions limit growth. In Asia, rising Fatty Alcohol costs and tightened palm oil supplies signal continued cost pressures in the AES market, potentially driving price volatility in the coming months.