For the Quarter Ending December 2024
North America
In Q4 2024, the North American Sodium Coco-Sulphate (SCS) market experienced a shift from stability to a buyer’s market due to oversupply and logistical disruptions. Initially, prices remained stable as supply chains were strained by a combination of factors, including the ongoing hurricane season, which caused port closures and significant delays on the U.S. Gulf Coast. These disruptions, along with the strike between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), created uncertainty in the arrival of SCS shipments, further extending lead times.
However, as the festive season ended and businesses began to clear inventories, the market became flooded with excess SCS. Despite production cost increases in exporting market, driven by rising coconut oil prices, the abundant supply in North America combined with weaker demand from the downstream personal care and detergent industries led to a price decline. North American buyers, capitalizing on the surplus and supply chain delays, gained negotiating power and successfully secured lower prices.
By the end of the quarter, destocking activities dominated the market, and the once-stable market shifted into a buyer's market, characterized by lower prices and reduced purchasing urgency.
APAC
The APAC Sodium Coco-Sulphate (SCS) market experienced a mixed trend in Q4 2024, with prices initially rising by 6% before falling by 2% towards the end of the quarter. Coconut oil prices in India rose sharply by 6.25% in October, pushing up production costs for SCS, with prices climbing from Rs 16,000 to Rs 20,800 per quintal. This was further driven by the Sabarimala season, leading to a supply shortage. In November, production costs continued to rise due to higher coconut prices, which surged to Rs 130 per kg, 15% above the regulated market price. However, the market saw a supply glut due to festive holidays causing logistical delays and excess inventory in warehouses, which counterbalanced the price hikes.
Despite a further rise in coconut oil prices in December, the oversupply situation and weak demand from key export markets such as Asia, Europe, and North America led to minimal price increases. Destocking activities and off-season demand in downstream industries contributed to a bearish market. With ample supply and subdued demand, the APAC SCS market saw a price depreciation by the end of the quarter, reflecting an oversupply and weak export conditions.
Europe
In Q4 2024, the European Sodium Coco-Sulphate (SCS) market faced a challenging environment characterized by oversupply and weak demand. The market sentiment remained bearish as the downstream paint, coating, and construction industries continued to struggle, leading to subdued demand for SCS. Despite the supply from APAC being steady, the market was flooded with excess SCS, contributing to an oversupply situation.
Logistical disruptions further exacerbated market conditions. Strikes at key European ports and reduced shipping capacities slowed down product circulation, causing delays and lengthening lead times. Port closures and bottlenecks in trade routes between major European hubs limited the movement of goods and contributed to the build-up of excess inventory in warehouses. This situation was compounded by slow trading activity, with businesses struggling to offload stock.
As a result, the market became heavily oversupplied, and the excess SCS inventory pressured prices downward. With demand remaining low and no significant recovery in sight, suppliers were forced to lower prices to clear stock. The stagnant construction sector and weak activity in the downstream industries further hindered demand. Consequently, the European market remained in a bearish state, marked by excess inventory, slow trade, and reduced prices throughout Q4 2024.
For the Quarter Ending September 2024
North America
The North American Sodium Coco-Sulfate market experienced a predominantly bullish trend in the third quarter of 2024, largely due to higher-priced imports impacting the local market. The increased production costs for Sodium Coco-Sulfate were primarily driven by a significant surge in coconut oil prices, which rose by over 13% in Southeast Asia. This price hike was exacerbated by a scarcity of coconuts resulting from the El Niño weather pattern, which disrupted coconut production and created material shortages that directly affected coconut oil availability. The scarcity of coconuts, as the primary input for coconut oil production, resulted in a pronounced supply shock that resonated throughout global markets, including North America.
Additionally, consumer spending in the U.S. saw a modest increase of 0.2% in August, according to the American Chemistry Council. This uptick, primarily driven by greater spending on services, indicated a potential rise in demand for Sodium Coco-Sulfate, especially in consumer goods.
Further complicating the supply situation were the disruptions caused by Hurricane Helene, a Category 4 storm that significantly impacted logistics and supply chains in the southeastern United States. The combination of these factors led to heightened prices and a bullish market environment for Sodium Coco-Sulfate during this quarter.
APAC
The Asian Sodium Coco Sulfate market experienced a price inflation of approximately 5% in the third quarter of 2024. This increase was primarily driven by rising feedstock costs, particularly Coconut Oil, which surged by about 5% towards the end of the quarter. Notably, Coconut Oil prices had increased by approximately 13% due to reported shortages of coconuts amid strong demand, resulting in a sustained upward trend throughout September 2024. Several factors contributed to this price surge. The El Niño weather pattern significantly disrupted coconut production, leading to material shortages that directly impacted coconut oil availability. Given that coconuts are the primary input for coconut oil production, this supply shock was particularly impactful. On the demand side, the soap and detergent sectors exhibited moderate performance in the early part of the quarter. However, as the quarter progressed, sales rebounded significantly, driven by improved consumer sentiment linked to the upcoming festive season. This resurgence in demand further bolstered the pricing of Sodium Coco Sulfate, reflecting the interconnectedness of seasonal consumer behavior and production challenges. Overall, the combination of supply constraints and revitalized demand contributed to the upward pricing trajectory of Sodium Coco Sulfate during this period.
Europe
The European Sodium Coco-Sulfate market experienced a predominantly bullish trend in the third quarter of 2024, largely due to higher-priced imports impacting the local market. The increased production costs for Sodium Coco-Sulfate were primarily driven by a significant surge in coconut oil prices, which rose by over 13% in Southeast Asia. This price hike was exacerbated by a scarcity of coconuts resulting from the El Niño weather pattern, which disrupted coconut production and created material shortages that directly affected coconut oil availability. The scarcity of coconuts, as the primary input for coconut oil production, resulted in a pronounced supply shock that resonated throughout global markets, including in Europe. Compounding these supply issues were delays in shipments resulting from ongoing crises in the Red Sea, which affected shipping routes and led to longer lead times for deliveries. Such logistical challenges further exacerbated the strain on the supply chain, making it difficult for European markets to replenish inventories promptly In Europe, the market typically experiences a downturn in demand following the summer vacations, but this year the recovery has been particularly sluggish. Many suppliers opted to stockpile inventories in anticipation of increased demand during the festive quarter, which often sees heightened transactions in preparation for seasonal sales.
