LABSA Prices Show Mixed Trend in the USA Amidst the Rise in Demand

In the US market, Linear Alkyl Benzene Sulphonic Acid (LABSA) showed a mixed trend in the first half of August 2023. Initially, LABSA prices rose at the start of this month and then stabilized by the mid-August. The LABSA market has experienced positive consumer sentiments from domestic and overseas businesses. The downstream surfactant sector has shown firm demand and increased feedstock Benzene and LAB prices, which has supported the price trend. Further, the disruption in the supply chain has been observed due to severe weather conditions and backlogs in the Panama Canal caused by reduced water levels.

In the US, the market value of LABSA surged by 2% in the first half of August, and according to ChemAnalyst, the price of LABSA was quoted to be USD 3020/MT FOB Illinois. Further, the feedstock Benzene prices increased due to increased upstream Crude oil prices, which raised LABSA production costs. Furthermore, the increasing trajectory can be attributed to the substantial inclination in inquiries from the downstream surfactant industry in the domestic market. The product demand outpaced the supply, which has kept the prices elevated.

Another factor that has impacted the LABSA market is the supply disruptions caused by the hurricane season in the US. Moreover, the continuous accumulation of vessels at the Panama Canal has played a significant role in causing interruptions to the supply chain. The El Nino phenomenon has reduced water levels, compelling regulatory bodies to impose restrictions on the quantity of ships that are granted passage through the canal. These occurrences have consequently exerted an influence on the pricing dynamics of LABSA within the United States market.

A significant increase in the demand for US LABSA is observed within the Asian market, particularly in China and India, has emerged due to a rejuvenated economy. The circumstances within the LABSA market have improved due to the recovery of the local market. Furthermore, buyers from Southeast Asia are proactively restocking their supplies, driven by dwindling inventory levels. This positive outlook suggests that these new buying endeavors could contribute to China's potential economic recovery. Despite the heightened demand, LABSA prices have steadily risen due to the consistent feedstock Benzene prices.

According to ChemAnalyst, this quarter is projected to experience a rise in LABSA prices, propelled by a potential upswing in demand from the surfactant industry downstream. Moreover, inadequate stocks might lead to price upswings, given that certain producers have run their facilities at lower capacities to prevent excessive accumulation. The prices of feedstock Benzene and upstream Crude oil could also influence the LABSA market's global prices.