www.icis.

com 22
|
ICIS Chemical Business
|
May 23-29, 2011
Check out our website for the latest news,
information and prices on chemicals and
commodities at icis.com/pricing
Xxxxxx
Xxxxxxxx
OLEOCHEMICALS
The European Commission -
nally announced on May 11 its
intent to add several surcharges
for fatty alcohols coming into
Europe from producers in India,
Malaysia and Indonesia, as a re-
sult of an antidumping investiga-
tion initiated in August 2010.
The Commission is enforcing a
4.8% surcharge for fatty alcohol
products imported into the EU by
India-based alcohol producer VVF,
as well as 9.3% surcharge from all
other India-based producers.
For Indonesia-based export-
ers, a 6.3% surcharge was en-
forced for P.T. Ecogreen Oleo-
chemicals, 4.3% for P.T. Musim
Mas and 7.6% for all other com-
panies. For Malaysian exporters,
KL Kepong Oleomas (KLK) was
charged with an additional 5.0%
surcharge, Emery Oleochemicals
5.3%, and the rest were charged
with 13.8% antidumping duty
rates. The surcharges were calcu-
lated on the basis of a comparison
of the average price of the dumped
imports and the target price of the
EU fatty alcohol industry, the
Commission reported.
It is expected that the imposi-
tion of provisional antidumping
duties will restore effective trade
conditions on the union market,
allowing the industry to align the
prices of the product investigated
to reect the costs of the various
components and the market con-
ditions, the Commission said.
The new duties, according to
the report, would enable EU fatty
alcohol producers to regain at
least part of the market share lost
during the investigation period
between July 1, 2009 and June
30, 2010.
The complainants involved in
the investigation were Germany-
based producers Cognis, which
is now part of BASF, and Sasol
Olens & Surfactants. The two
fatty alcohol producers account-
ed for more than 27% of total EU
alcohol production, according to
the Commission.
The union industry has suf-
fered material injury caused by
the dumped imports from Indo-
nesia, India and Malaysia, the
Commission said. Majority of
the injury showed a negative
trend during the period covered,
particularly related to nancial
performance such as cash ow,
return on investments and prot-
ability In the absence of meas-
ures, a further deterioration in
the union industrys economic
situation appears very likely.
INDUSTRY REACTION
Even before the dumping duties
were announced, the probability
of the surcharges brought a great
deal of anger among smaller Eu-
ropean alcohols buyers who felt
they were unable to afford the
prices of material currently of-
fered by Europe-based manufac-
turers. With the possibility of the
new duties to become perma-
nently xed, some buyers said
they might be forced to pull put
of the market altogether, given
continued high fatty alcohol pric-
ing since last year, the worst-
case scenario being that our plant
would be forced to cease opera-
tion, one buyer said.
The situation is going to
worsen for us going into the third
quarter. We are going to be faced
with no alternative but to seek
synthetic options if the duty con-
tinues to remain in place, the
buyer added.
Another buyer noted that the
announcement will likely keep
fatty alcohols at a continued high
level and possibly even reach
new highs. Some EU buyers will
have no choice but to continue
buying from Asian producers, de-
spite potential higher prices, be-
cause of the additional import
duties, noted Manoj Jha, CEO of
India-based oleochemical consul-
tancy UNIDUS.
I spoke to a couple of Asian
producers, and it seems most of
them will pass on the duty to end-
users. Looks like EU end-users
and consumers have to shell out
higher prices for their shampoos
and detergents just to save two
producers Cognis and Sasol,
he said.
Jha added that many Malay-
sian producers may le a com-
plaint because of the high dump-
ing rates of 13.8% charged for
their materials. I heard many of
them will protest, so the sur-
charge may not be implemented
soon, he said.
According to the Commis-
sions report, EU fatty alcohol
users that have signicant pres-
ence in major end-markets
such as personal care, home care
and industrial detergent prod-
ucts have complained that the
antidumping measures would
create problems of product avail-
ability, considering there are
only two big fatty alcohol pro-
ducers in Europe and that de-
mand for the alcohols has been
steadily on the rise.
Still, the Commission reported
that the overall impact appears
to be limited, even if most of the
EU alcohol users are likely to be
negatively impacted by the
import measures. The relatively
low level of proposed measures
should not preclude them of
continuously importing from the
countries concerned. Imports are
also always possible from other
third countries, which are not
subjected to the measures.
NEW PRODUCER IN EUROPE
News of Singapore-based Wilmar
International building a natural
alcohols plant in Rotterdam, the
Netherlands, in partnership with
US producer Huntsman, also
raised hopes among European
alcohol buyers of a possible eas-
ing of tight supply.
Wilmar announced on May 9
its plans to build and operate a
natural alcohols plant at Hunts-
mans site in Rozenburg and to
supply natural alcohols to
Huntsman. The facility is sched-
uled to come on stream by 2013.
One buyer said this news
could pave the way for other pro-
ducers in the Far East who may
wish to avoid any potential dif-
culties that may arise as the anti-
dumping duties come into effect.
The buyer is hopeful that Europe
will witness an increase in pro-
duction that will result in a bet-
ter-balanced market and a further
decline in the cost of fatty alco-
hols in the future. The added sur-
charges come at a time when the
global fatty alcohols market
www.icis.com 22
|
ICIS Chemical Business
|
May 23-29, 2011
Check out our website for the latest news,
information and prices on chemicals and
commodities at icis.com/pricing
SOURCE: ICIS
/tonne
EUROPEAN FATTY ALCOHOLS
PRICES ON THE RISE
1,000
1,500
2,000
2,500
3,000
May
2011
Feb
2010
FATTY ALCOHOL DORIS DE GUZMAN NEW YORK
EU fatty alcohol buyers hit by duties
New surcharges on fatty alcohol imports from India, Malaysia and Indonesia amid tight market anger EU alcohol buyers
R
E
X

F
E
A
T
U
R
E
S
EU adds 13% surcharge to fatty alcohol imports from Malaysia
ICB_230511_022-023 22 18/5/11 19:43:23
OLEOCHEMICALS
May 23-29, 2011
|
ICIS Chemical Business
|
23 www.icis.com
BASF pushes
into Asia, but
warns market
FEATURE P32
continues to remain rm on the
back of tight supply and rm
feedstock costs.
TIGHT MARKET CONTINUES
In Europe, the majority of mid-
cut fatty alcohol second-quarter
contracts settled at 2,6002,800/
tonne ($3,7144,000/tonne), up
by 400/tonne from Q1 contracts,
according to buyers and sellers.
The contract prices, which
were settled on a free delivered
(FD) Northwest Europe (NWE)
basis, are now at a record high for
European material.
Many buyers, however, were
reluctant to settle quarterly
contracts and instead opted to
cover themselves on a monthly
basis. A signicant number of
consumers still prefer to operate
on a spot basis as they believe
prices of fatty alcohols will soon
drop to take into account the
lower feedstock values, one
trader said. The record-high pric-
es in Europe have primarily been
driven by the rising cost of the
feedstock crude palm oil during
the rst quarter of this year.
However, news of increased
production in Malaysia, the major
source of the feedstock for
Europe, has since resulted in
lower prices.
The majority of European alco-
hol buyers remain concerned that
any additional duties passed on
to them would make it virtually
impossible to maintain reasona-
ble prots.
One buyer opted to purchase
less mid-cut material than nor-
mal. It is more cost-effective for
me to limit the amount of stocks
produced from my plant than pay
these prices, he said.
Market participants remain
unclear over how long the high
prices for all grades of fatty alco-
hol material in Europe will re-
main, although many believe the
longer that buyers continue to
gamble on the market by covering
on a hand-to-mouth basis, the
longer the upward pressure on
prices will be exerted.
PRESSURED MARKETS
At the recent ICIS World
Surfactants conference held in
New Jersey, US, major US-based
fatty alcohol supplier P&G
Chemicals noted that it has also
been trying to raise prices.
About half of the companys
oleochemical production is used
internally for Procter & Gamble,
with the other half sold on the
merchant market, said Tom
Nelson, director of customer
business development at P&G
Chemicals, who spoke at the
conference. The spiking cost of
raw materials has a huge impact
on us. We are trying to raise pric-
es [on the consumer products
side], he said.
Emery Oleochemicals CEO
Kongkrapan Intarajang, who also
spoke at the conference, noted
that global margins for fatty alco-
hols are likely to remain high for
the next 12 years.
Demand remains strong and
capacity in China is not running
full-out, said Intarajang.
While fatty alcohols prices
could fall if feedstock palm ker-
nel oil prices drop, margins are
likely to be robust because of the
tight supply-demand balance,
he added.
Intarajang said he expects
oleochemicals demand in Asia
to rise by around 7%/year. O
Additional reporting by Neha
Popat in London and Joseph
Chang in New York
Looks like EU end
users and consumers
have to shell out
higher prices for their
detergents
MANOJ JHA
CEO, UNIDUS
Evervondered"vho'svho"
ingIobaIbaseoiIsuppIy?
www.lwiller.com/lClSlraining
formorein!ormationvisit
vvv.icis.comlaseOiIsTrainingCourses
TondoutmoreaboutaIIup-comingICI5courses,
visitvvv.icis.comltraining
ICB_230511_022-023 23 18/5/11 19:43:37