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Nov 10, 2023LABSA Demand Declines Globally with Prices Remaining Stable in US while Falling in Asia
Nov 06, 2024The Linear Alkyl Benzene Sulfonic Acid (LABSA) market exhibited a downward trend across global markets in the previous week, primarily due to dwindling demand from downstream industries and falling feedstock prices. However, LABSA prices remained stable in the USA, while the Asian market experienced a decline. The overall price trend was impacted by the decrease in feedstock LAB and upstream crude oil prices, with WTI crude oil dropping by about 4% and Brent crude by 3%. Furthermore, demand from the major downstream surfactant industry slowed down despite adequate supply levels, which persisted even amid port congestion due to substantial domestic inventories. These factors collectively led to stable LABSA prices, with the product quoted at USD 2309/MT FOB Illinois, while the Chinese LABSA price decreased by 1.5% FOB Qingdao for the week ending August 23, 2024.
In the US, the LABSA market maintained stable prices amid a narrow balance between supply and demand during this timeframe. However, demand for LABSA softened due to weaker downstream requirements from the detergents and cleaning industry. Despite the easing cost of feedstock LAB, which fell by about 1%, supply constraints contributed to the consistency in LABSA prices. Market sentiment in the US was also influenced by significant disruptions in the supply chain caused by ongoing labor strikes in Canada, which affected the balance of supply and demand. The uncertainty around potential strikes in Canadian railways further raised concerns about product availability. Moreover, export activities weakened due to competitive pricing from international traders, prompting North American producers to adopt more flexible export pricing strategies to remain competitive and avoid excessive inventory buildup. Even though sales volumes increased in the second quarter across laundry, cleaning, and other end markets, the LABSA market remained relatively moderate in August due to declining demand in both domestic and global markets. Despite these conditions, overall prices for LABSA remained steady for the week according to market players.
Meanwhile, the Asian LABSA markets experienced weak downstream demand as regional markets slowed down after the summer season. With supply sufficient to meet market needs, traders reduced prices to encourage purchasing activity. Further, the decline in feedstock LAB costs, along with falling crude oil prices, alleviated cost pressures on LABSA. The decrease in crude oil prices was driven by market expectations of increased supply from OPEC and non-OPEC producers amidst indications of weakening global demand.
According to ChemAnalyst, the price of LABSA is projected to rise in global markets in September, mainly due to the expected increase in upstream Benzene and feedstock LAB prices. This is anticipated despite the likelihood of continued moderate demand from the downstream surfactant industry.