Linear Alkyl Benzene (LAB) Price Trend and Forecast — ChemAnalyst
The cost of Linear Alkyl Benzene (LAB) price underwent a gradual recovery in the North American region during the quarter ending in September 2023. Contributing factors to this positive trend included a slow but steady increase in the downstream sector and a rise in export orders. At the onset of the quarter, high inflation dampened consumer sentiments, leading to tightened financial conditions and a reduction in consumer spending in the downstream market. In contrast, the LAB prices in the American market were influenced by high global crude oil values, particularly evident in September 2023. A substantial increase in LAB prices was noted, driven by heightened export inquiries and the elevated global crude oil value. The prices of the raw material benzene remained elevated, continuously rising throughout the latter half of the quarter, thereby increasing production costs for the commodity. Meanwhile, the country’s downstream surfactant market maintained a moderate pace, with domestic inquiries showing a slight increase towards the end of the quarter. Consequently, buoyed by these market dynamics, LAB prices effectively rose in September, subsequently impacting the prices of downstream derivatives like LABSA.
During the quarter ending in September 2023, the European market experienced a significant uptick in the price of Linear Alkyl Benzene (LAB), primarily propelled by heightened demand and an increase in feedstock Benzene prices. Additionally, the elevated costs of upstream Naphtha and Crude oil exerted a considerable impact on LAB production expenses, reinforcing the overall upward price trend for the quarter. The demand from the regional downstream surfactant industry remained steady. Notably, prevailing inflation and high-interest rates in the European region led to delays in production run rates, prompting manufacturers to adjust commodity pricing to maintain profitability. Moreover, the supply of LAB from European countries, particularly the Netherlands and Belgium, faced constraints, visibly impacting the price dynamics of the product. Eurostat data indicated a decline in European industrial activities in the preceding month, with the Industrial Production output in the Euro Area experiencing a -1.1% change in August 2023 compared to the previous month. This sentiment appeared to persist into September in the current quarter.
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