In the final week of January 2023, the Chinese Linear Alkyl Benzene (LAB) market witnessed a modest uptick of 0.6% in prices, fuelled by a concurrent 1% surge in feedstock Benzene prices. This rise in raw material costs consequently elevated overall production expenses for LAB in the country.

The Container rates, however, are showing signs of anticipated stabilization in the lead-up to the Chinese New Year, as the initial shock from the Red Sea crisis diminishes, and new vessels are deployed to address the challenge of maintaining weekly services. Carriers, now focusing on the post-Chinese New Year period, are looking beyond the order surge expected during the festival, following a substantial 126% surge in the Shanghai Containerized Freight Index (SCFI) since the end of November 2023. Despite an anticipated correction, it is expected that freight rates will largely retain recent gains post-Chinese holidays due to persistent shortages in vessel capacity and container equipment, although opinions on this matter vary among analysts. The uncertainty surrounding the pre-Chinese New Year cargo rush, driven by a lack of visibility on available capacity, led to a significant spike in rates, causing some apprehension in the LAB market.

In contrast to the Chinese market, the price of LAB displayed stability within the US market during the same week. This resilience was attributed to the meticulous equilibrium sustained between demand and supply dynamics. Despite the challenges posed by escalating feedstock Benzene costs and increasing global freight charges, the demand for LAB remained closely synchronized with available supplies, preventing substantial fluctuations in prices. In December, contract negotiations in the USA were reaching their final stages, marked by increasing cost pressures and limited availability of LAB. The ongoing deceleration in demand and intense cost competition from petrochemical alcohols exerted downward pressure on the market, leading to squeezed margins for products. Notably, the price of detergent-grade LAB FOB Louisiana (USA) maintained a steadfast position at approximately USD 2040/MT over the course of the week.

However, in the Indian market, a noteworthy 1% decrease in the price of LAB was observed during the same week, marking the fourth consecutive week of declining prices. This reduction can be attributed to subdued demand stemming from the downstream Surfactant industry, primarily influenced by the off-season winter demand. The customary decrease in surfactant sales during this period significantly contributed to the overall reduction in LAB prices within the Indian market. Despite the downward trend, the market remains dynamic, and stakeholders are closely monitoring the interplay between various factors influencing LAB prices in the region.