Moderate Terminal Demand Weighs Downs the European Fatty Alcohol Market Growth in Late May 2024

Hamburg (Germany): In the European market, the prices of Fatty alcohol have been decreasing since May 2024. Moderate inquiries from the downstream personal care industries have led to bearish sentiments in the Fatty alcohol market. Furthermore, inflationary pressures have impacted Fatty alcohol production activities across the region. Despite this, weak demand from the downstream market has continued to weigh down Fatty alcohol market sentiments.

According to the ChemAnalyst database, the prices of Fatty alcohol have declined by approximately USD 70 per ton in the domestic market of Germany in the week ending May 24, compared to the prices observed at the start of this month. The availability of upstream palm oil, essential for producing Fatty alcohol, has been sufficient to meet downstream needs. Market sources indicate that weaker palm oil exports from Malaysia have pressured prices, with expectations of a significant increase in production further impacting palm oil prices. Meanwhile, manufacturing firms have maintained sufficient operations, producing adequate quantities to meet market demand without causing oversupply. The stocks of finished goods have stayed at optimal levels, contributing to market stability.

On the other hand, Malaysian palm oil exports increased by 2.4% to 3.1% between May 1 and May 25 compared to the previous month, according to market sources. Indonesia's palm oil exports also rose, reaching 2.56 million tons in March, up from 2.17 million tons in February, as reported by its palm oil association. Considering energy inputs, global oil prices stabilized due to the potential for OPEC+ to maintain oil supply cuts at its June 2 meeting and expectations of strong U.S. summer fuel demand, which balanced concerns about prolonged high U.S. interest rates. Higher crude oil futures enhance the attractiveness of palm oil as a feedstock for biodiesel production. Additionally, the ringgit, the currency used in the palm oil trade, appreciated by 0.06% against the dollar, having limited to no bearing over the final transactions of the procurements. A stronger ringgit might result in higher prices for Fatty alcohol in international markets, affecting the competitiveness and profit margins of exporters.

According to ChemAnalyst's pricing intelligence, the prices of Fatty alcohol might inch higher across regional markets. Market players anticipate an improvement in demand from the downstream personal care industries, which are likely to strengthen the market growth of Fatty alcohol. However, in Europe, macroeconomic conditions have continued to pose challenges for the manufacturing sector and could continue to pressure the market dynamics of Fatty alcohol.