Fatty Alcohol Ethoxylates Market Batters with the Strain of High Raw Material Costs
Fatty Alcohol Ethoxylates Market Batters with the Strain of High Raw Material Costs

Fatty Alcohol Ethoxylates Market Batters with the Strain of High Raw Material Costs

  • 13-Dec-2024 8:45 PM
  • Journalist: Jacob Kutchner

November witnessed a dramatic surge in Fatty Alcohol Ethoxylates prices across Malaysia and China, but what triggered this unexpected rise? Severe floods, policy changes in Indonesia, and shifting market dynamics for key inputs like palm oil and Ethylene oxide combined to create a perfect storm. Behind these numbers lies a tale of disrupted supply chains, international trade shifts, and mounting pressure on the personal care industry.

A major factor impacting palm oil prices was the supply disruption from severe flooding in Peninsular Malaysia. The region experienced some of the worst floods in a decade, damaging plantations and delaying harvesting, transport, and milling. These challenges raised concerns over reduced palm oil production, which has contributed to the upward price pressure as reflected in Fatty Alcohol Ethoxylates prices. As a result, buyers were bracing for a lower palm oil supply, which typically translated to higher prices for Fatty Alcohol (immediate raw material) and then Fatty Alcohol Ethoxylates in the domestic market.

Indonesia's decision to raise its export tax and reference price for crude palm oil (CPO) in November impacted global palm oil price dynamics. As the world’s largest palm oil producer, Indonesia increased its CPO price by 10.3% and export tax by 44%. This made Indonesian palm oil more expensive on the international market, prompting buyers to turn to Malaysia as an alternative. The increased demand for Malaysian palm oil pushed prices higher, which subsequently led to a rise in Fatty Alcohol Ethoxylates costs. As a result, Fatty Alcohol Ethoxylates 3 Mole EO FOB Klang prices increased by 25% in November 2024.

Similarly, in China, Fatty Alcohol Ethoxylates prices rose by 25% in November, driven by higher palm oil prices. Additionally, a 1.2% month-over-month increase in Ethylene oxide prices further reinforced the rise in Fatty Alcohol Ethoxylates prices.

In the personal care sector, rising raw material costs have created additional challenges, escalating costs for manufacturers and affecting the pricing and availability of personal care products in China. China's personal care sector in November 2024 exhibited a blend of resilience and underlying challenges, reflecting broader economic trends. Core inflation rose 0.3% year-on-year in November, up from 0.2% in October, suggesting a gradual recovery in demand for non-essential goods, including personal care products. However, overall consumer inflation remained subdued at 0.2%, missing expectations, and highlighting the persistent struggle to ignite robust retail activity.

Looking ahead, ChemAnalyst Pricing Intelligence anticipates a significant increase in Fatty Alcohol Ethoxylates prices in early 2025, driven by Indonesia’s biofuel quotas and rising palm oil costs. This will raise input costs, pushing up Fatty Alcohol Ethoxylates prices, particularly impact the personal care sector.

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