European Fatty Alcohol Prices Witness Buoyancy Amid Bullish Raw Materials Prices in Early Q2 2024

Hamburg, (Germany): Throughout March 2024, the prices of Fatty Alcohol have remained high in the European market. The increasing prices of upstream Palm Oil amid constrained production in key manufacturing nations, Indonesia and Malaysia, have led to higher manufacturing costs for downstream derivatives, including Fatty Alcohol. Additionally, elevated interest rates, labor disputes, and growth concerns in Germany's industrial landscape have been raising questions about the nation's economic future. Strikes and economic uncertainty are casting a shadow over the outlook, with broader implications for Germany's economy, pressuring market sentiments for Fatty Alcohol.

The ChemAnalyst database has shown that the prices of Fatty Alcohol increased by USD 20 per ton in the week ending April 5th, 2024 as compared to the previous week. Along with rising upstream Palm Oil prices, the reduced operating rates of Fatty Alcohol manufacturing firms have also exerted supply-side pressure on the market fundamentals of Fatty Alcohol, which has led to bullish market sentiments. Considering the input energy material required for Fatty Alcohol production, European gas prices have dropped to levels last seen before February 2022, hitting a three-year low in February 2024. This decline is attributed to mild weather and increased renewable power output, which has lowered gas demand and reduced the need to withdraw gas from storage. According to the data from Gas Infrastructure Europe, Europe's gas reserves are also currently 59% full, marking a record high for this time of year.

Furthermore, The Malaysian Palm Oil Council (MPOC) expects Crude Palm Oil (CPO) prices to decline to the RM 3,800 to RM 4,000 per tonne range in April 2024, down from the current RM 4,250 per tonne level. This forecast is based on the gradual seasonal recovery of palm oil production in Malaysia. With the end of the low season for production in March, palm oil prices could start to reflect the increased production and inventory levels in April and May, which might limit further price increases, easing the manufacturing costs of downstream Fatty Alcohol.

According to the pricing intelligence of ChemAnalyst, the prices of Fatty Alcohol are anticipated to witness an uptrend in the regional market. The recovery in demand across the Asian market is likely to keep Fatty Alcohol market sentiments bullish and lead to an improvement in market transactions. Additionally, European market players are also optimistic about the turnaround in demand from the downstream market followed by a possible interest rate cut anticipated in the second quarter of 2024.