Global Linear Alkyl Benzene Market Declines as Weak Demand and Year-End Destocking Weigh on Prices

The Linear Alkyl Benzene (LAB) market witnessed a downturn in global trading during the past week, driven primarily by weakened demand from the downstream LABSA (Linear Alkyl Benzene Sulfonic Acid) sector, raw material for the surfactant and detergent industries. The seasonal slowdown in the consumption of detergents and cleaning products further exacerbated the declining demand for LAB. Adding to this downward trend, the cost of key feedstock Benzene saw a decline, resulting in reduced production costs and ultimately easing LAB prices. Regionally, market softness was evident, with LAB prices in China dipping by 1.5% FOB Nanjing, while in Germany, prices fell by 2% FOB Hamburg. Similarly, the US market saw a 1.5% decline in FOB Louisiana for detergent-grade LAB by the week ending November 22, 2024. 

The LAB market in Asia experienced a decline during the period, primarily driven by weakened demand across both domestic and international markets. The downstream LABSA industry, a major consumer of LAB, played a pivotal role in this downturn. Market activity in November remained sluggish, reflecting the expected seasonal slowdown as the year-end approached. This trend aligns with established consumption patterns, as demand for detergents and cleaning products' key applications for LAB typically softens after the peak spring and summer months. Thus, market participants are bracing for continued bearish sentiment in the near term, underscored by a combination of seasonal factors and limited consumption momentum.

The European and US LAB markets also experienced a downward trajectory this week, primarily influenced by subdued demand from downstream industries. Weak consumption trends, coupled with declining Benzene feedstock costs, further weighed on LAB pricing. Additionally, ample market supply, driven by lower consumption rates, contributed to the persistent price softness in both regions. Geopolitical factors, including the ongoing Russia-Ukraine conflict and tensions in the Red Sea region, have added to the complexity of global market dynamics. These issues, combined with fluctuating freight rates, disrupted trade flows and impacted overall market sentiment. Despite these logistical challenges, inventories in Europe and the US remained sufficient, surpassing demand levels, which further eased price pressure. As a result, LAB prices in these regions declined, reflecting a bearish outlook driven by a combination of ample supply, reduced demand, and global trade uncertainties. 

According to ChemAnalyst, the global LAB prices are anticipated to continue their downward trajectory through December 2024, primarily influenced by widespread year-end destocking activities. Producers and traders are expected to focus on reducing inventories ahead of the new year, exerting sustained pressure on prices. Additionally, the easing cost of Benzene feedstock is likely to contribute further to the downward price trend.  With reduced purchasing activity and weak consumption trends typical of the year-end season, market sentiment is expected to remain bearish.