In the first week of April 2024, the price of Linear Alkyl Benzene (LAB) saw a notable increase in both the US and Chinese markets, closely tracking the surge in upstream Crude Oil prices. LAB prices in the US market rose by around 0.5%, reflecting the 3.7% increase in Crude Oil values globally. This uptick in demand for both LAB and Crude Oil signals a market rebound as destocking approaches its conclusion.

Global Crude Oil prices experienced a second consecutive weekly gain, reaching six-month highs amidst geopolitical tensions between Israel and Iran, raising concerns about potential supply disruptions. The rise in Crude Oil prices has heightened fears of inflation and prompted attention from central bankers, policymakers, and investors worldwide.

OPEC and its allies, collectively known as OPEC+, opted to maintain their current oil supply policy, urging member countries to adhere more closely to output cuts. Analysts at ChemAnalyst anticipate a tightening market scenario in the second quarter of 2024, expecting a drawdown in oil inventories as demand continues to recover.

Similarly, in the Asian market, LAB prices in China edged up by approximately 0.5% during the same week, driven by increases in both feedstock Benzene prices and Crude Oil values. The improving trend in the freight industry has boosted consumer and supplier confidence, leading to a rapid increase in LAB exports from China to other Asian countries. The smooth operations within the freight industry have improved trading atmospheres in the region and supported upward price trends.

Furthermore, the surging food and beverage industry in Asia is fuelling demand for surfactants like LAB, contributing to the price momentum. As economies in the region continue to recover from pandemic-related disruptions, industries reliant on chemical inputs, such as surfactants, are experiencing heightened activity.

Overall, the simultaneous price increases in LAB in the US and Asian markets underscore the interconnectedness of global markets, with Crude Oil prices acting as a key driver of pricing trends. The ongoing geopolitical landscape and supply dynamics within the oil market will likely continue to influence prices in the coming weeks, shaping market conditions for chemical derivatives like LAB across continents.

ChemAnalyst predicts that in the latter half of April 2024, the price of LAB is expected to rise. This anticipated increase is attributed to anticipated hike in demand from the downstream LABSA (Linear Alkyl Benzene Sulfonic Acid) industry, driven by favourable seasonal factors. Additionally, the ongoing upward trend in upstream Crude Oil prices is likely to further impact the LAB market in the coming weeks.