Editor Serena Seng, serena.seng@icis.com

 NOTE: For full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on "methodology".

Market Summary

Supplies in the Asian fatty acids market continued to be tight week-on-week due to less fractionation, market sources said. Fuelled by higher demand and rising palm stearin and olein values, C8 caprylic, C12 lauric, C14 myristic, C16 palmitic, C18 triple pressed stearic acid and C18 stearic acid rubber grade saw price hikes while prices in the other acid groups were stable week-on-week.

Prices for C8 caprylic acid rose $50/tonne to $1,550-1,600/tonne FOB SE Asia on the back of tighter supplies week-on-week. Demand for C8 had increased and the current shortfall in the market was contributing to upward price pressures, market sources said. Although some regional producers had pegged forward month offers at $1,650-1,700/tonne SE Asia, market participants said offers at such levels were unlikely to attract any buying interest. 

In the C10 capric acid market, prices were assessed unchanged at $2,100-2,200/tonne FOB SE Asia, reflecting firm transactions and buy-sell ideas heard. A regional trader concluded March shipments at $2,100-2,200/tonne FOB SE Asia. Separately, a producer was heard concluding March shipments at $2,300/tonne FOB Malaysia though this deal could not be confirmed. Offers were largely located in the range of $2,200/tonne FOB SE Asia for material of Malaysian and Indonesian origin.

Fuelled by higher crude palm kernel oil (CPKO) prices in the week to Wednesday, prices of C12 lauric acid rose $50/tonne on the high end of the range to $1,150-1,250/tonne FOB SE Asia, reflecting bids and offers heard. A regional trader was rumoured to have concluded 100 tonnes at below $1,100s/tonne FOB SE Asia early this week, however this deal could not be confirmed. Although offers were largely located at $1,200-1,250/tonne FOB SE Asia, market sources said material was still available at $1,150/tonne FOB SE Asia.  

Prices in the C14 myristic acid market rose $50/tonne on the low end of the range to $1,500-1,550/tonne FOB SE Asia in tandem with higher CPKO values. A producer was heard concluding a deal for March at $1,500/tonne FOB SE Asia. Majority of offers were heard in the range of $1,500-1,550/tonne FOB SE Asia. Market sources said price hikes were likely in the coming weeks if CPKO values kept increasing.

In the C16 palmitic acid market, prices rose $30/tonne to $980-1000/tonne FOB SE Asia reflecting bids and offers heard. Although there were rumours that a deal was heard at $960/tonne FOB SE Asia early this week, this could not be confirmed. Separately, offers as high as $1,020-1,050/tonne FOB SE Asia were heard, however, most market participants said prices at such levels were too high and not reflective of current buying sentiments.

Despite tighter supplies, demand for C18 oleic acid remained steady. Prices were assessed unchanged at $1,220-1,280/tonne FOB SE Asia amid thin trade. As there were market talks that prices were likely to increase further, buyers continued to stay on the sidelines and were holding off buying activity until a clearer price trend could be determined, sources said.

Fuelled by higher palm stearin values, prices of C18 stearic acid triple pressed (TPSA) rose $30/tonne to $930-980/tonne FOB SE Asia reflecting bids and offers heard in the week to Wednesday. There were no deals heard. Market participants said supplies of TPSA continued to be low in the market and further tightness in supply was likely to contribute to higher prices in the coming weeks. 

Stronger demand drove prices of C18 rubber grade stearic acid (RGSA) higher by $30-50/tonne to $900-950/tonne FOB SE Asia week-on-week. No deals were heard though offers remain largely located at $900-950/tonne FOB SE Asia. As TPSA values were rising, demand for RGSA, a lower cost subsitute for TPSA, has started to pick up, market sources said.   

Feedstock Prices

The Crude palm oil (CPO) March delivery contract was settled at M$2621/tonne ($777/tonne), down M$35/tonne from the previous week. Similarly, the April contract was concluded down M$25/tonne at M$2,621/tonne ($776/tonne). Refined, bleached and deodorised (RBD) palm stearin March contract prices rose $30/tonne to $780/tonne FOB Malaysia week-on-week. Refined, bleached and deodorised (RBD) palm olein March prices rose $4.50/tonne higher at $812.50/tonne FOB Malaysia from the previous week. Crude palm kernel oil (CPKO) rose $18/tonne to $913/tonne FOB Malaysia for April contracts.

($1=M$3.37)

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