Asia market quiet amid global financial turmoil
Trading activity in the Asian fatty acids market was subdued amid the ongoing volatilities in the global financial and commodity markets. The US debt crisis was the main factor affecting buying sentiment this week as players feared a repeat of 2008 crisis.
Most players were staying on the sidelines to monitor the global markets as well as the impact on feedstock and fatty acid prices.
The prices of fatty acids largely remain stable-to-soft, with the exception of the C12 lauric and C14 myristic acid group, which saw prices rising on the back of tight supply. The operating rates of many regional producers remain at below 80% as demand has yet to firm up.
Fractionated fatty acids
In the C8 caprylic acid market, prices are stable at $3,350-3,400/tonne FOB SE Asia, reflecting deals, bids and offers heard. The prices of C10 capric acid are also unchanged from the previous week at $1,450-1,500/tonne FOB SE Asia. Market players said the buying activity for C8 caprylic and C10 capric acid was weak as demand was limited to the usual few applications. Offers of heat stable C810 blended acid were heard at $2,400-2,450/tonne FOB SE Asia this week.
The supply imbalances in the C12 lauric acid and C14 myristic acid group showed no signs of abating as the bulk of producers continued to raise their offers for September cargoes for this pair of acids. The supply of C14 myristic acid and C12 lauric acid has started to tighten as producers are fractionating less of this pair of acids despite the drop in feedstock crude palm kernel (CPKO) oil prices.
Offers of September cargoes of C12 lauric acid were heard at $1,550-1,570/tonne FOB SE Asia, while bids were heard at $1,400-1,450/tonne FOB SE Asia. Indonesian-origin material was heard offered lower at $1,450-1,500/tonne FOB as CPKO prices remain low in the country.
The prices of C14 myristic acid rose by $50/tonne to $3,550-3,600/tonne FOB SE Asia, in line with the firmer bids and offers heard. Cargoes were mainly for September loading as August cargoes were fully sold.
Buying activity in China was weak as most market players stayed on the sidelines to monitor the situation in the global financial markets. The prices of locally produced C12 lauric acid fell by yuan (CNY)500/tonne to CNY12,000-12,500/tonneEXW this week. The prices of C14 myristic acid are flat at CNY28,000/tonne EXW. Only one local producer was heard to have cargoes available in the domestic market. The rest of the local producers were heard to have sold out their allocations for August-September.
Demand in the C16 palmitic acid market has yet to pick up despite the upcoming summer season as players in the animal feed sector have yet to resume firm buying activity, traders said. Activity in the C16 palmitic market was mostly quiet with prices stable at $1,150-1,200/tonne FOB SE Asia.
Similarly, the prices of C18 oleic acid are flat at $1,500-1,550/tonne FOB SE Asia, reflecting the buying and selling indications heard. Demand was limited to the usual contracts and trading activity was largely subdued this week.
Meanwhile, in the C18 stearic acid triple pressed (TPSA) and C18 stearic acid rubber grade (RGSA) group, lower feedstock palm stearin prices fuelled lower bids and offers this week. The prices of TPSA are down by $80/tonne at $1,070-1,120/tonne FOB SE Asia, while those of RGSA fell by $50-70/tonne to $1,050-1,100/tonne FOB SE Asia.
The prices of TPSA in the Chinese market dropped by CNY200/tonne to CNY9,100-9,300/tonne because of the prevailing weak demand.
Feedstock prices
The Bursa Malaysia crude palm oil (CPO) August delivery contract was traded at Malaysian ringgit (M$) 3,100/tonne ($1,031/tonne), down by M$17/tonne from the previous week. Indonesian CPO August delivery contracts fell by $38/tonne to $1,040/tonne FOB Indonesia this week.
Refined, bleached and deodorised (RBD) palm stearin August contract prices are down by $45/tonne to $895/tonne FOB Malaysia. Refined, bleached and deodorised (RBD) palm olein August prices fell by $30/tonne to $1,150/tonne FOB Malaysia. CPKO prices are up by $74/tonne at $1,295/tonne FOB Malaysia this week.
Freight rates
From southeast Asia to northeast Asia: approximately $10-30/tonne
From southeast Asia to Japan: approximately $10-50/tonne
($1= M$3.00)
($1= CNY6.42)
This week in ICIS News( www.ICIS.com)
10/08/2011 06:17China’s Renesola Q2 net profit down to $1.8m on sale price decline
10/08/2011 06:00Bharat Petroleum offers 70,000 tonnes naphtha for late Aug, early Sep
10/08/2011 00:44US aromatic solvent spot prices rise 1, 3 cent/lb on barge values
09/08/2011 15:38Time is ripe to acquire publicly-traded chemical companies
09/08/2011 20:21US cuts oil, natgas price outlooks, citing slowing economy
