Germany's Detergent Alcohol Market: Buckling under Weak Terminal Demand, Prices Tumble

Hamburg, Germany: For the past two quarters, the manufacturing sector in Germany has been facing challenging market conditions and this trend has continued in early Q3,2023. Despite the ease in energy prices and subsequent drop in inflation across the European region, the demand from the downstream Personal Care industries remains lackluster, exacerbating the Detergent Alcohol market concerns. The prices of key input materials required in the personal care sector such as Fatty Alcohol, and Detergent Alcohol have been consistently declining for the past few weeks. The eurozone's economy has recovered from an extended period of stagnation, while inflation within the 20-member currency area is showing a decline from its peak last year. In an effort to stabilize economic growth and curb inflation, the ECB has implemented a succession of interest rate hikes, mirroring the actions taken by the US Federal Reserve and the Bank of England.

The decline in inquiries from the downstream surfactant and detergent sector has been responsible for the downshift observed in the price realizations of Detergent Alcohol. In addition, on the upstream front, the stockpiling of Palm Oil in the key manufacturing nation, Indonesia and Malaysia has led to discounted prices for importing nations and Detergent Alcohol manufacturing firms. In addition, energy prices have been coming down from their record high in the past 2 years, despite of it, Detergent Alcohol manufacturers across the German market were still not out of the woods. As per the market participants, the inquiries from the European market for Detergent Alcohol have plummeted by approximately 50% from their usual purchasing volumes, weakening the market sentiments for Detergent Alcohol. The ChemAnalyst database has shown that the prices of Detergent Alcohol have dropped by USD 70 per ton on the week ending 28th July.

Furthermore, heavy rainfall has raised water levels on the Rhine in Germany, but the river remains too shallow in central northern areas for Detergent Alcohol cargo vessels to have sailed fully loaded. Up to this point in the summer, there has been enough rainfall to prevent a crisis on the river. Last year in 2022, German manufacturing firms encountered supply bottlenecks and production problems due to a drought and heat wave, leading to unusually low water levels on the Rhine.

According to the pricing intelligence of ChemAnalyst, the prices of Detergent Alcohol might witness a downward trajectory in the European market. The slumping production amid a downturn in demand from the personal care sector is likely to exert significant pressure on the market fundamentals of Detergent Alcohol in the forthcoming weeks.