MARKET OVERVIEW – GREEN CHEMICALS VALUE ADDED OLEOCHEMICALS METHYL ESTER Market situation of Methyl Ester (ME) in 2021, demand decreased from the previous year. The domestic demand for ME products was estimated at 4.4 million liters per day (1.4 million tons per year), a decrease of 0.57 million liters per day (0.18 million tons per year) or 11%, mainly due to the COVID-19 pandemic of Delta variant especially during the 3rd quarter resulting in lower diesel demand both in the tourism, transport of agricultural goods and consumption sectors. In addition, the government’s policy that wanted to encourage people to use B10 biodiesel as the country’s main diesel instead of B7 was not accepted. In addition, biodiesel blends were reduced to B6 in October and B7 in December. As a result, the country’s overall ME demand was lower than the government’s forecast of 7 million liters per day. The supply in ME market was strongly competitive, especially in the last quarter of 2021 as a result of new producers and capacity expansion of current producers in total of 0.87 million liters per day (270,000 tons per year). However, the domestic ME price increased Baht 9.8 per kilogram or 27%, consistent with the domestic crude palm oil price, to Baht 46.51 per kilogram. FATTY ALCOHOL The global fatty alcohol (FA) demand climbed, compared to the previous year, the outbreak of the COVID-19 virus began causing the closure of the buyers’ countries in both America and Europe, including major buyers of fatty alcohols such as China and India to control the spread of the virus. In the second half of 2021, the COVID-19 pandemic of the Delta variant began to improve as a result of increasing vaccinations, particularly in the United States and European countries, causing signs of economic recovery in the countries as mentioned above, including China, which is a major customer in the market. In addition, demand for detergents and hygiene products continued to improve. Also, the production capacity of major Antioxidant producers was expanded, resulting in the increase of market demand and causing the total purchasing power of the fatty alcohol market to improve. The supply remained relatively tight because the Middle East fatty alcohol producers changed their fatty alcohol production line to be used to produce other products instead, including that many manufacturers in China, due to the Chinese government’s Dual Control Energy Policy, it was necessary to temporarily suspend production from the end of Q3 to the end of Q4 of 2021. This caused the overall supply of fatty alcohol in the market to decline. As a result of these factors, the FA price in 2021 rose US$ 690 per ton, or 56%, from US$ 1,227 per ton in 2020 to US$ 1,917 per ton, consistent with the crude palm oil price. FATTY ALCOHOL ETHOXYLATE The market situation of fatty alcohol ethoxylate in 2021 showed a recovering growth rate due to the COVID-19 pandemic. As a result, the demand for sanitary-related products increased. However, it was also affected by external factors such as currency fluctuations. Tightness from unbalanced cargo ships and containers on each continent and higher shipping rates affected the volatility of fatty alcohol prices in late 2021. Most fatty alcohol ethoxylate manufacturers had been operating at full capacity to respond to the available demand that continued throughout the year. However, important factors affected global supply, such as the shortage of shipping containers and greatly increased freight rates. As a result, customers had to adjust the supply of fatty alcohol ethoxylate by increasing the proportion of raw materials used mainly in the country. This reduced shipping costs and the risk of supply chain disruption that caused import delays. However, most manufacturers’ capacity-building plans were still in place across all regions. From the big players in Europe, the demand for environmentally friendly products also increased. The price of fatty alcohol ethoxylate in 2021 rose and moved within the range of US$ 1,400 - 1,780 ton, following the increase in raw material prices this year from the reduction of fatty alcohol and ethylene oxide production due to turnaround maintenance at key production sites in many countries. Fatty alcohol ethoxylate prices started to slow down in the third quarter, following a continued slowdown in fatty alcohol prices since the second quarter. In contrast, ethoxylated 66 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
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