European Market Update
By: Anais Bartoletta, EurAsia Mid and Heavy Cuts Product Manager
P&G Chemicals is excited to announce that since January 2021, all products sold in the European marketplace are available as RSPO MB grade. This is in response to broad customer requests. Please contact your Account Executive so we may co-create a plan for supply.
Overall and despite the resurgence of the COVID-19 pandemic, the European marketplace has demonstrated solid recovery from the first wave of lockdowns with dynamics varying per industry. P&G Chemicals has seen “spot” requests increase within the first quarter of 2021 in the context of availability challenges, major logistic disruptions on intercontinental freight, and continuously rising lauric oil prices. We are monitoring the situation in the Suez Canal and will remain in close communications with our suppliers and customers as we determine the impacts of this latest supply chain disruption.
• The global pandemic highlighted the need for cleaning products, which continues to drive demand for mid-chain and long chain fatty alcohols.
• The light cuts are responding to strengthening trends among the personal care, MCT, and agriculture businesses. Import delays linked to a shortage in container availabilities and ports congestion is constraining supply.
• In parallel, sustainability remains a key focus for our customers and end users, driving strong demand for RSPO MB across products. Securing RSPO MB PKO oil has become increasingly challenging for oleochemical producers as this requirement grows.
P&G Chemicals nurtures our long-term partnership with bulk shippers to ensure a continuous flow of feedstock into our European production sites, guaranteeing undisrupted and on-time delivery to our customers. The disruptions in northern Europe created by the recent winter weather episode have been overcome. We are now closely monitoring Brexit and the low water level in the Rhine, which have potential to add pressure in the coming months.
This calendar year appears to be even more VUCA (Volatile, Uncertain, Complex, and Ambiguous) than CY2020, which may be hard to believe. The rapid rise in lauric oil prices, the increasing logistics costs to move material out of Asia, the strong demand for limited RSPO MB PKO, and the economic recovery from the global pandemic have the combined potential to turn the oleochemical market into its next bullish cycle after the one from 2015-2017.