The fatty alcohols (FA) demand in 2023 improved slightly relative to the previous year, primarily attributed to a post-COVID-19 recovery. However, the overall market remained volatile, especially in China, where economic activities still did not rebound to the anticipated level, while customers in India delayed purchases as the government imposed countervailing duties (CVD) of 3-30% on imports from Indonesia, Malaysia, and Thailand. In addition, there were vulnerabilities resulting from the global economic recession, inflation, and geopolitical tensions, which impacted the confidence of market players and caused them to become more cautious in their purchasing decisions and purchase only as necessary for each use. On the supply side, no domestic market obligations (DMO) restricting or prohibiting palm oil exports were announced by major producers like Indonesia as in the previous year. Although some producers had halted their production, the overall supply for fatty alcohols improved due to the fact that a number of fatty acid manufacturers had shifted their production lines to fatty alcohols. The average fatty alcohol price fell considerably from the previous year from approximately US$ 2,335 per ton to US$ 1,467 per ton, representing a US$ 868 per ton decrease, attributable to the decline in crude palm kernel oil (CPKO) prices, which dropped in line with the economic slowdown. As for the fatty alcohol ethoxylate market, the demand experienced a slowdown compared to the previous year. In the first half of 2023, the demand saw an increase during Q1 due to concerns over feedstock costs but began to show a clear slowdown as the feedstock prices weakened in Q2. However, the demand in the latter half of the year recovered as the prices of its feedstocks – fatty alcohols and ethylene oxide – surged. On the other hand, the supply dwindled due to the annual turnarounds of some major producers in Q3 and an economic slump in China, which prompted Chinese manufacturers to begin exporting SLES (sodium lauryl ether sulfate) to create alternative sales channels, resulting in price interference and affecting the demand for upstream products, such as fatty alcohol ethoxylate. As a result, the price of fatty alcohol ethoxylate in 2023 slid by US$ 442 per tons, or 23%, from the previous year to US$ 1,448 per ton. The oleochemicals market in 2023 saw a decline in demand, attributable to an economic and production slowdown in various regions, which resulted in delayed raw material orders and the downward adjustment of inventory levels throughout the supply chain. Market Forecast for 2024 The ME market in 2024 is expected to see a 4% uptick in demand. Starting from January 1, 2024, the EURO 5 diesel will be enforced to enhance emission control and reduce particulate matter from diesel engines. It is anticipated that Thailand will continue to maintain a B7 biodiesel blending ratio as the fundamental oil throughout the year. Additionally, the market will be buoyed by various economic stimulus policies from the government, while the market supply will stabilize due to the absence of expansion plans from domestic producers. As a result, the ME price in 2024 will show a slight improvement in line with crude palm oil prices in the country. Demand for fatty alcohols in 2024 will likely improve slightly, primarily due to the global economic recovery, which will prompt most buyers to increase their purchase volumes to restock their inventories. Meanwhile, the overall supply in the industry will likely trend upward, driven by the plans of fatty alcohol producers in Indonesia to expand the production capacity by 140,000 tons per year while other manufacturers have no plans to halt production. However, the prices of fatty alcohols are expected to increase in line with the anticipated surge in palm kernel oil prices driven by a decline in domestic and international supply, echoing the trend of the reference price of the Malaysian Palm Oil Board (MPOB). The fatty alcohol ethoxylate market will likely rally, driven by the increase in the number of tourists, private consumption, and political stability in Asia. Demand for home and personal care (HPC) products, agrochemicals, and chemicals related to EV production will see higher growth rates, while demand for textile chemicals, paper chemicals, and construction chemicals is anticipated to slow down due to the fragile global economic condition. However, economic 76
RkJQdWJsaXNoZXIy ODg4NTI=