The Linear Alkyl Benzene Sulfonic Acid (LABSA) market saw notable price declines in both the United States and Europe during the last week of December 2024. In the U.S., FOB Illinois LABSA prices dropped by 4% week-on-week, while in Germany, FOB Hamburg prices declined by 4.6% as of the week ending December 27, 2024. This downturn in prices was primarily driven by several factors, including a reduction in demand from key downstream industries, falling feedstock prices, and broader market pressures related to logistical disruptions and geopolitical instability. 

In the United States, the LABSA market softened as downstream demand slowed, particularly from the detergent and cleaning product sectors, which are major consumers of LABSA. These industries typically experience a slowdown during the holiday season, with many companies halting or reducing production during the final weeks of December. Further, pre-holiday stockpiling had ensured that inventories were well-stocked, which reduced the immediate need for procurement. The drop-in feedstock LAB prices, driven by an oversupplied market and reduced downstream demand, further lowered production costs of LABSA.

Freight rates remained elevated due to capacity constraints and supply chain disruptions, especially on the Gulf Coast. Drewry forecasts a rise in Transpacific rates next week, driven by front-loading ahead of the ILA port strike and anticipated tariff hikes. These ongoing supply chain issues hindered any significant rebound in LABSA prices.

In Europe, LABSA prices, particularly in Germany, declined due to weaker demand from downstream industries like detergents, personal care, and cleaning products, which reduced production during the holiday season. Declining LAB feedstock prices and economic instability, especially in Eastern Europe, further pressured prices. Additionally, energy supply uncertainties, particularly around natural gas, led to slower industrial production, further suppressing demand for LABSA in the final week of December.

Moreover, Freight rates in Europe also remained relatively stable, though logistical disruptions, such as port congestion in some areas and freight delays, continued to add to the overall cost structure. The combination of weak demand and rising transportation costs has left the European LABSA market in a state of flux, further complicating the outlook for the industry in early 2025. 

Looking ahead to January 2025, the LABSA market in both the U.S. and Europe is expected to remain subdued. Demand is projected to stay weak as downstream industries continue to grapple with the post-holiday recovery, and economic conditions in both regions are expected to remain uncertain. The LABSA market will likely see limited recovery in the short term, with prices continuing to face downward pressure from the weak demand and lower feedstock costs. Freight rates may continue to impact market conditions, although some normalization is anticipated as logistical disruptions ease.