LABSA Prices Slide Across Asia and Europe in H1 November 2024 Amid Weakened Demand

In the first half of November 2024, the LABSA market in both Asia and Europe saw a decline in prices, driven by a cautious market outlook as the year-end approached. The main cause of this decrease was the weakened demand from the downstream surfactant industry, resulting in lower consumption of LABSA. Furthermore, the drop in feedstock LAB costs contributed to the easing of LABSA prices. Market participants expected continued reductions in demand for detergents and cleaning products, which typically slows at the end of the year, adding additional downward pressure. Consequently, LABSA prices in China dropped by 0.7% FOB Qingdao, while in Germany, they fell by 2.4% FOB Hamburg.

The LABSA market in Asia saw a decline during this period, mainly due to weakened demand from both domestic and international markets, with the downstream surfactant industry playing a significant role. Although demand in November remained relatively steady, market sentiment began to shift, reflecting the anticipated seasonal slowdown as the year-end approached. This gradual decrease aligns with typical consumption patterns, as the demand for detergents and cleaning product's key applications for LABSA tends to ease after the peak spring and summer months. Furthermore, the upcoming holiday season is expected to reduce industrial activity, especially in sectors producing household and industrial cleaning agents, which will put additional pressure on LABSA demand.

Similarly, the LABSA market in Europe also experienced a downward trend in the first half of November, primarily driven by weak demand. The decline in feedstock LAB prices further impacted LABSA pricing, contributing to the overall decrease. At the same time, supply remained sufficient as downstream consumption weakened. Port congestion at Hamburg’s automated Container Terminal Altenwerder (CTA), worsened by HHLA’s modernization efforts, led to a reduction in sailings into Germany’s largest port, further disrupting the supply chain. Moreover, ongoing geopolitical tensions from the Russia-Ukraine conflict have created market uncertainty, affected supply, and added to broader regional economic challenges, which have also impacted the LABSA market.

As per ChemAnalyst, the LABSA prices are anticipated to follow a downward price trend through November and December 2024, primarily driven by widespread year-end destocking activities. Additionally, the easing of feedstock LAB prices is expected to further impact LABSA prices in the short term. As producers and traders prioritize inventory reductions ahead of the new year, prices are likely to face continued downward pressure. Moreover, subdued demand from key sectors such as detergents and cleansing agents, combined with reduced production costs, is expected to reinforce the ongoing price decline, resulting in a persistently weak market sentiment in the coming months.