Update: Fatty Alcohols Sector (Mid & Heavy Cuts)

As we navigate the complexities of the global oleochemical market, this update focuses on the current state of mid-cut and heavy-cut alcohols. Key market dynamics present both challenges and opportunities, driven by feedstock prices, tariffs, macroeconomic factors and regulatory changes.

Lauric oil prices remain high, creating a challenging environment for producers and buyers alike. While there has been a slight decrease in palm kernel oil (PKO) prices, the European Union Deforestation Regulation (EUDR) remains a critical factor to monitor. There have been a number of recent developments and announcements from the EU Commission, which need to be followed closely to understand what will be approved by the Parliament and Member States and any impacts this may have.

Demand for coconut oil (CNO) remains strong in the Philippines and globally. Any change to the EUDR implementation dates may have a knock-on effect on demand and availability of coconut oil (even though it is not in scope), especially since last year’s delay provided some temporary relief to a tight CNO market at the time. On the other hand, recent typhoons in the Philippines could impact CNO production, adding another consideration that needs to be factored in by stakeholders.

The current macroeconomic climate is characterized by uncertainty, which we’re seeing reflected in the demand for fatty alcohols. Due to ongoing tariff developments, costs have increased and supply has proven uncertain for imports into the U.S. Additionally, as we navigate hurricane season, we are closely monitoring demand fluctuations and safety stock levels as customers manage year-end inventories.

In this context, businesses need to stay flexible and ready to adapt to these economic changes. Effective inventory management can help mitigate the risks associated with unexpected shifts in demand and supply.

At P&G Chemicals, we are committed to sustainability and are actively working with customers to help them meet their carbon management goals. Our portfolio of naturally derived low carbon solutions includes not only mid- and heavy-cut fatty alcohols but also a range of fatty acids, glycerin and methyl esters.

Additionally, we provide resources and support that align with the growing demand for sustainably produced and responsibly sourced solutions. Our commitment not only enhances our product offerings but also positions us as a resilient and reliable partner in this evolving market.

Ensuring that our materials are responsibly sourced is increasingly becoming a business imperative – a must-have, not a nice-to-have. By offering low carbon solutions, companies can meet their climate and sustainability goals, address regulatory and stakeholder needs, and create value for both suppliers and customers.

Together, this allows us to drive growth in a responsible and inclusive way – where we all win, including our suppliers, customers, stakeholders, communities and the planet.

In a global market characterized by emerging regulations and trade winds, we remain committed to providing supply assurance for our customers in the countries in which they operate. We appreciate your continued trust and partnership as we work together to navigate the complexities of the fatty alcohols market.