Shortage of Feedstock and High Demand Drive Up Alkyl Ether Sulphate Prices in the US Market

Prices of Alkyl Ether Sulphates have seen an uptick of almost 2% in September 2023, as prices of feedstock Ethylene Oxide escalated by more than 6% and upstream Crude Oil by almost 8% in the US market. The prime reason for the increment in the prices of Alkyl Ether Sulphates is attributed to a shortage in the supplies of feedstock Ethylene Oxide due to the implementation of force majeure at Dow Chemical’s Ethylene Oxide manufacturing plant located at Plaquemine, Louisiana, which caught fire on July 15, 2023. Key market players report that the plant is expected to be non-functional for at least 6 months, which is expected to have detrimental rates in the supplies of feedstock Ethylene Oxide and in the production of Alkyl Ether Sulphates.

Demand from the soap and detergent industry remained strong as temperatures continued to be recorded at above-normal levels and precipitation levels below normal, further increasing the demand for Alkyl Ether Sulphates. According to the National Oceanic and Atmospheric Administration (NOAA), the climate outlook for the upcoming quarter, that is, from October 2023 to December 2023, favors above-average temperatures being recorded in the Central, Eastern Northeastern, and much of Western United States and as the effects of Western North America Heatwave of July 2023, are yet to recede, with Central and Southern Parts recording highest temperatures being ever recorded. This further bolstered the demand for Alkyl Ether Sulphates for soap and detergent industries. Moreover, US Federal Reserve officials state that monetary policies must stay restrictive for a while to cool inflation rates to the target corridor of 2%, which indicates possible increments in the last quarter of 2023, which may lead to an increase in the prices of Alkyl Ether Sulphates.

Prices of Alkyl Ether Sulphates are expected to increase further due to the delayed winter season across the United States and the shortage of feedstock Ethylene Oxide, as demand for Alkyl Ether Sulphates is expected to last longer than average. Increasing prices of Crude Oil are also expected to support the current bullish trend of Alkyl Ether Sulphates by causing an increment in production costs. As demand for Diethylene Glycol as an antifreeze agent is also expected to weak due to the delayed winter season, processing of Ethylene Oxide is also expected to lower amidst the constant demand from the soap and detergent industry, which may lead to an undersupplied market of Alkyl Ether Sulphates which can further escalate the prices of the product. However, prices may stabilize in the month of January 2024, as the Federal Bank expects to bring inflation rates down to the target corridor, and Dow Chemical expects the resumption of operations in its Ethylene Oxide plant at Plaquemine, Louisiana.