Prolonged Demand Stagnancy Leads Global LAB and LABSA Prices to Shrink

The price trend for Linear Alkyl Benzene (LAB) and Linear Alkyl Benzene Sulfonic Acid (LABSA) followed a downward trajectory across the global market in May. The primary reason is sluggish demand coupled with ample product availability in the market. Moreover, the price trend for feedstock Benzene has also shown a declining price movement, further decreasing the costs of LAB and LABSA across the international market. Excess stockpiling of the product has caused the sellers to lower the prices to sell their stock.

The European market witnessed a dwindling price trend in May, as LAB and LABSA prices reduced by 9% each. In Germany, the LAB FOB Hamburg price reached down to USD 1540/MT while the price for LABSA reached USD 1408/MT FOB Hamburg. This decline was on account of decreasing costs of upstream Benzene in the European market, which fell by 4% in Germany. A similar decrement in price was seen in the price of upstream Crude oil, thus influencing the LAB and LABSA costs.

In the USA, the LAB and LABSA market was also influenced by abundant accessibility of the product amid weaker demand from the downstream surfactant market. The market participants have shown a cautious attitude towards fresh purchases as they expect it to reduce further in the upcoming months. The price decline of 1% was noted for both LAB and LABSA; however, feedstock Benzene prices decreased by an overall 9% this month to hit USD 1247/MT FOB Louisiana in the US. This downward trend indicated an excess supply of products in the market as an increase in demand was expected; nevertheless, an opposite demand trend was seen, leading to product stockpiling. Furthermore, the upstream Crude oil price decline can further explain the price trend of LAB and LABSA in the US.

Asia is a major importer of LAB and LABSA from the European and US market, but the demand from the Asian region has not been satisfactory as expected this season. The unexpected decline and excessive inventories have led the market participants to offer discounts to overcome product stockpiling. The operational rates have been kept in check to meet market demand and avoid losses.

As per ChemAnalyst, the price of LAB and LABSA in European countries is expected to decline further in June but rebound in the upcoming months in accordance with the demand and supply gap and global economic fluctuations. The US market for LAB and LABSA is expected to decline in June; however, prices may rise in the third quarter as the market dynamics are expected to improve.