North America
In Q2 2024, the North American fatty acid market displayed mixed trends, shaped by several key factors. In April, fatty acid prices rose primarily due to increased production costs, driven by higher palm oil prices. Additionally, a decrease in manufacturing operating rates added supply-side pressure. Manufacturers responded to these bullish upstream price trends and limited availability of finished goods by maintaining elevated prices to protect profitability. However, as the quarter progressed, fatty acid prices began to stabilize, moving within a narrower range.
In the U.S., where price changes were most pronounced, seasonal factors contributed to fluctuations in demand, affecting overall price dynamics. A growing inventory of natural gas, along with declining energy costs, also played a role, aligning with the downward pressure from falling global palm oil prices.
Comparing the first and second halves of the quarter, prices saw a slight 1% decline. The quarter ended with Stearic Acid Triple Pressed DEL USGC priced at USD 1,880/MT in the U.S. Notably, there were no significant disruptions or plant shutdowns reported, highlighting stable supply conditions amidst the easing price trend.
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APAC
The APAC fatty acid market experienced upward pricing trends during Q2 2024, driven by several factors. Rising upstream palm oil costs, due to constrained production and growing demand, were key contributors. Additionally, active inquiries from the downstream personal care sector bolstered market sentiment, encouraging manufacturers to maintain higher prices. Supply-side challenges, including limited availability of finished goods and operational disruptions, further tightened the market balance.
China saw the most significant price increases, driven by stronger demand from the personal care industry and higher palm oil procurement. Prices in China increased by 3% compared to the previous quarter, reflecting a consistent upward trend. Post-holiday manufacturing activity also surged, increasing procurement needs. The interplay between downstream demand and upstream cost pressures sustained positive market sentiment. By the end of Q2, China recorded a 1% price increase between the first and second halves of the quarter, with fatty acid C8-C10 FOB Shanghai priced at USD 2,230/MT, underscoring a strong pricing environment fueled by resilient demand and supply constraints.
Europe
In Q2 2024, the European fatty acid market saw upward price trends, driven by higher production costs and bullish palm oil prices. Reduced operating rates among manufacturers exacerbated supply-side pressures, pushing costs higher. Strong demand from downstream sectors, especially personal care, further contributed to the price increase.
Shipping disruptions in the Red Sea, which forced vessels to reroute, resulted in longer transit times and higher freight charges, further inflating transportation costs. Germany saw the most pronounced price increases, driven by reduced manufacturing activity and higher input costs. The tight supply and rising demand reinforced bullish market sentiment. Seasonal demand for personal care products also supported the price rise.
Year-over-year, fatty acid prices saw a significant increase, with a 27% rise compared to the previous quarter. The difference between the first and second halves of Q2 was minimal, with a 1% increase, reflecting consistent upward movement. The quarter ended with fatty acid C8-C10 FOB Hamburg priced at USD 3,130/MT, highlighting the strong price environment driven by supply constraints, rising production costs, and robust downstream demand.
Get Real Time Prices for Fatty Acid: https://www.chemanalyst.com/Pricing-data/fatty-acid-1257
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