Fatty Alcohol Prices Decline Amidst Decreased Demand and Economic Uncertainty; Potential Rebound Expected

Hamburg, Germany: At the start of the third quarter of 2024, Fatty Alcohol prices began on a bearish note. This downward trend is primarily due to a decrease in inquiries from downstream personal care industries, which has negatively influenced Fatty Alcohol market sentiments. Persistent inflationary pressures and stringent monetary conditions have significantly impacted the purchasing behavior of end-use industries, further contributing to the bearish market outlook. The combination of reduced demand from personal care manufacturers and broader economic challenges has led to a cautious approach in procurement, exacerbating the Fatty Alcohol price decline.

With the week ending on 5^th July, the prices of Fatty Alcohol have dropped by USD 20 per ton compared with the previous week. Manufacturing activity in the eurozone declined significantly last month as demand for products, including Fatty Alcohol, dropped sharply, despite factories reducing their prices. This decline in demand has led to low market transactions for Fatty Alcohol. On the upstream front, the availability of Palm Oil was also sufficient to meet the demand from the downstream oleochemicals industries.  In the last week of June 2024, palm oil imports reached 25,842 tonnes, with Italy leading at 17,742 tonnes. This brought the total imports since the beginning of July to 3.26 million tonnes, down 19% compared to last year. The top importers this season are Italy (1.14 million tonnes), the Netherlands (946,110 tonnes), Spain (483,373 tonnes), Germany (257,497 tonnes), and Sweden (104,427 tonnes).

Furthermore, In the first half of 2024, Germany's chemical industry, including Fatty Alcohol manufacturing firms reported sales totaling 112 billion euros ($121 billion), marking a 1% decline from the 114 billion euros recorded in the same period the previous year, according to industry association VCI. The sector, which ranks as Germany's third largest and employs around 500,000 people, is facing ongoing challenges. As per the market sources, the terminal customers of Fatty Alcohol remain hesitant to place new orders due to continued economic uncertainty, which has led to sustained high prices for raw materials and energy.

According to the pricing intelligence of ChemAnalyst, the prices of Fatty Alcohol might progress in the northward direction. By mid-Q3, a significant number of manufacturers are scheduled to undergo maintenance shutdowns during the holiday period, leading to a supply crunch. In anticipation of this supply shortage, terminal manufacturers of Fatty Alcohol are likely to raise their procurement levels to ensure adequate stock. This increased demand, combined with reduced supply, is expected to drive up the prices of Fatty Alcohol. As a result, a notable price hike is anticipated in the European markets in the forthcoming weeks.