December 2021 / New Year – Monthly Surfactants
Happy New Year
As promised, we have here our monthly blog for the remaining part of December and an end of year short story. The story is set on New Year’s Eve and starts in the control room of a specialty chemical plant. If you don’t want to be bothered with the story and associated moralizing, you can skip straight to the news section which is clearly marked. OK? So here we go then…
Oh and by the way, the story is fiction. It's not based on any real events or places. Although - you may recognize some characters, thoughts and feelings from your own life. Alright here we go...
The Story
Emerald - A New Year’s Eve Short Story
John gazed at the pale green screen. It yielded nothing of interest. Nothing at all really. No phones. No books or magazines even, allowed in the plant control room at Veritas Chemical, ever. Not even New Year’s Eve, when basically nothing was happening. Well, nothing that the control room cared about. There was some last-minute shipment being drummed off out there for a customer in Thailand or Taiwan or someplace round the world. That’s Karl’s thing, drumming. He liked getting up close and personal with the product out on the plant floor, like a real working man. Couldn't stand the control room for too long - in there with the computers and the other expensive crap that would break if you looked at it the wrong way. John liked it there though. It was high-tech-ish. Everything at his fingertips, under his control, except Karl’s little drumming empire, the last redoubt of true manual labor at Veritas.
Karl burst into the control room with a flourish and sample in his hand.
“OK Johnny boy. Last sample of the last shipment of the year for analysis and then it’s what…. Johnny what is it?” Karl grinned expectantly.
“erm… a mega piss-up, Karl?”
“No Johnny. The mega-est piss-up of the year with the entire Westside motorcycle club in attendance and their wives and girlfriends and significant others and Lisa, that chick from behind the bar at Murphy’s who will be my arm candy for the evening and maybe more if the lucky lady plays her cards right – know what I mean, Johnny”
“Yes Karl, I believe I do. Good luck then”
“And you Johnny boy – stopping by the club later are ya? Lisa might bring her mate with the boots; you know the one…”
“Erm actually I have a date tonight, Karl, so er probably won’t make it over there this time. Thanks though” hell why did he have to mention the date?
“A date? Like a proper date with a girl...?” Karl inquired with a rising tone of utter disbelief
“Who is it then?” he challenged before John could respond.
“Just someone I met and er yeah so, we’re going to a movie and dinner and her name’s Kat and… are you going to analyse that sample and get those drums out of here so we can go home?”
Karl loaded the sample into the GC “Kat eh? From in there?” he waved in the general direction of the Veritas offices and smirked “with the green hair – who does accounting and stuff – wow Johnny boy – nicely done buddy. Outta my league for sure. I mean not looks-wise, although she’s very good looking, v-e-r-y and I mean very nicely proportioned if you know what I mean – but you know she’s a bit too intellectual (he almost spelled it out) for me. I think she’s like studying for some business degree at night - so quite brainy you know” He added in the sort of hushed tones that one might use to mention an unfortunate physical defect.
“Yeah well she seems nice and maybe it’s a bit much to bring her to the club on a first outing, you know, Karl”
“Sure, that’s cool man. You wanna stay on the right side of the tracks with that brainy intellectual one, tonight. I get it”
“Ok then” Karl stared at the display and did his dopey imitation drum-roll thing “ Analysis says…. 98.5 .. another award winning batch of H-105 from the Veritas Chemical Company, courtesy of Karl-Heinz Rickenbacker the best drummer this side of the Hudson River”
“There’s not really that much this side of the river Karl, but actually - did that say 98.5? It looked like a 93 from here man”
“John, John John” Karl intoned as he switched off the GC and filed the sample with the week’s batches “The spec is 98 minimum, as you know, and so the analysis on this new year’s eve, approximately 119 minutes from my ron-day-voo with the lucky and lusty Lisa and approximately 179 minutes from when Interfreight swings by to get this last shipment of 2021 on its way to China, is of course a full 98.5 my boy. No question”
“I thought it was going to Taiwan, Karl”
“Same thing bud. Says it right here on the Commercial Invoice – Republic of China - so just pop that 98.5 on the C of A and we outta here man – time to find out if green is that Kat’s real hair color, eh? know what I mean Johnny eh?” Karl cackled like the 15-year-old trapped in a 40-year old’s body that he was.
“I’m pretty sure that it’s not her real color, Karl and OK I guess 98.5 it is if you are absolutely sure about it?”
“Sure as you are about your girlfriend’s hair”
“She’s just a date, mate, come on. Here’s your C of A then and I’ll see you next year ok? All the best to you er don’t drink too much eh?”
“Planning on it Johnny! Happy New Year mate!”
Shower, new jeans and a splash of Paco later, John is sat across from the green-haired Kat at Murphy’s, Guinness in hand and feeling mildly buzzed after pre-game shots with this brother before heading out. Kat observed her first date for a year since moving across the country to start again, again. And it had to be some guy from work, didn't it – although John didn't really count because he worked over there in the plant with dirt under his fingernails and that coarse skin on his large strong hands. She snapped out of her bodice-ripper moment but not before glancing at John’s nails which were surprisingly well manicured – for a plant guy. Stereotypes aren’t what they used to be, she shrugged inwardly. Just as well. This guy seemed nice enough – certainly better than his buddy out there on the plant who almost had her calling HR in her first week at Veritas.
Some old guy put Thin Lizzy on the jukebox. The dueling Celtic riffs of Emerald ricocheted around the pub.
“Good song” said John
“Great song”
Wow thought John
“How about being black and Irish?” pondered Kat
“Is that a trick question? Erm – I dunno. Guinness - that’s black and Irish”
“Er haha – no. Phil Lynott the lead singer of Thin Lizzy. He was black and Irish and a huge figure in 70’s rock - all over the world. Have you heard the words to this? It’s about the Irish struggle to regain what was rightfully theirs...”
Down from the glen came the marching men, with their shields and their swords
“Sure, I know the words, but you know some of them bother me – this bit coming up”
When they left the town was empty. Children would never play again
John warmed to his theme
“I mean they’re supposed to be singing about the good guys, right? but they have to bring kids into it. It’s pretty sad that lyric – a bit disturbing”
“True John, but that’s life, isn’t it? It’s like the Passover story. Before the Jews could get out of Egypt, all the little first-born boys of the Egyptians had to be killed, didn't they? And it was God did that – so if it’s good enough for God, it’s good enough for the Irish right?”
“Yeah, I guess but, I never liked that story either Kat. I guess the Pharoah had lots of chances to do the right thing, but I suppose things just got out of hand. One mistake compounded on another and pretty soon it’s the ultimate horror”
“Wow look at us being all deep and morose and philosophical. I need another drink and so do you. same..?
Kat returned from the bar with a Guinness, a Cider and two shots of something that looked and smelled like Bushmills. What a first-class young lady, thought John. We need to cheer things up round here, thought Kat. These shots’ll fix it – or not.
Aaah – nice – the golden liquid did its job
“– so, John you from round here originally?”
“Westsider all my life. In fact I reckon I was born in this pub..”
“Conceived maybe” observed Kat wryly with a raised eyebrow.
Funny girl – and yes, kinda clever.
“And you, Kat. Where are you from?”
“New York, then Cali, then New York again. Moved around a bit you know. I’m hoping this is home for a while at least”
“You like it at Veritas?”
“It’s OK. Not bad. It pays the bills and I’m learning – a lot really and I’m getting my MBA at night... so yeah, I guess I like it. And I can more or less be myself as long as the job gets done. The people aren’t bad either – no real jerks that I’ve come across – although do you know the owner, Flannery Jr? They say he’s a piece of work, when he shows up”
“Yeah – the new owner you mean. He’s Flannery’s son. Took it over from Mr. Flannery last year. Stay away from that guy. He’s the opposite of his dad. Basically, a playboy. Only wants money from the company and leaves the running of things to the execs on the 3rd floor. “
“Oooh a single rich playboy then?” Kat did that thing with the twirly hair and pouty lips “maybe I should meet him. Wouldn't need to bother with the MBA then..ha”
“More like a married rich sleazeball. I’d say I feel sorry for the unlucky Stella – Heinz Rickenbacker Flannery, but I hear she gives as good as she gets in the sleaze department, so I guess they’re a perfect match”
“Oh – Rickenbacker – that's your buddy in the plant? No relation though, right?” Kat laughed
“Unfortunately, yes, the relationship is that he’s the idiot step-brother of the the evil step-sister Stella. And look, despite what you might think” Kat untwirled her hair and rolled her eyes “he’s the most decent one of the bunch. He’s a good guy underneath all the macho-talk. He wouldn't hurt anyone – unless he thought they were going to hurt a friend of his – and he’s fundamentally honest. He can’t lie really – which has gotten him into a few fights over the years, but he’s a straight up honest guy who well.. at least I thought so until”… John’s voice trailed off and he gazed into the bottom of his now empty Guinness glass.
A moment passed. Bob Marley filled the dead air.
Exodus… movement of ja people
“Er hello.. John… where’s John? Did he disappear into the Guinness glass, like Alice?” Kat squawked like a cross between the Red Queen and Dame Edna.
“Yeah, no, I’m good. Just something at work earlier. Anyway, no big deal. It’s New Year’s so..”
John offered a far-too-weak smile and stared back into the glass, looking for something.
Open your eyes and look within
“Hey look, if this is your broody-mysterious schtick – it doesn't get you into my jeans. Just so you know...”
“Kat – no. Good grief. I got no schtick, believe me. No it’s stupid. Anyway, I get paid by the hour and right now I’m not on the clock – I’m on your clock – the cute funny smart-girl clock. So, let’s get going or we’ll miss the movie”
He peered uncertainly into her eyes, which he noticed were exactly the same color as her hair, which was weird, but cool. He kept peering.
Are you satisfied with the life you’re livin’
“Ooops I lost you again. You’re behind my eyes now. What are you doing there you naughty boy” Red Queen / Edna asked
“I think… Karl... might have lied to me this afternoon”
“Goodness. Saint Karl told a lie?” Kat’s mock incredulity hit hard
John ploughed on
We know where we’re goin’
“That last batch of H-105. He told me it analyzed at 98.5 but honestly Kat, to me, from where I was sitting, it looked like a 93 and I know he was dead-keen to get out for New Year’s and see that Lisa ‘n all so maybe he just fudged it and, well, I’m the one who put it into the system, so I fudged it as well” John eyes refocused on Kat’s. “What does that H-105 do anyway? You probably see all that with your work in the office. It’s going to Taiwan, which is not China erm...”
“Yeah I know it’s not China, John... H-105 - that batch is going to EVA air. The last shipment I set up before leaving tonight - actually goes into a lubricant – for aerospace. So – basically keeps airplanes flying - so yeah I guess pretty important”
We know where we’re from
“Ooof Kat. We gotta do something. That stuff can’t go out tonight. What if an airplane falls out the sky and … it’s all on me”
“What, John. What are you going to do? Call the nightshift from Murhpy’s on New Years Eve and shout above the pub-noise to tell them not to ship the 105.? It’s getting picked up in an hour from now and I don’t think your boozy phone call would go down well over there”
“Kat – you’re smart and work in the office. What can we do?”
“Oh right, I’m smart-and-work-in-the-office so I can just wave my magic wand right – well… hmmm... maybe – ‘cos I kinda have a magic wand right here on my phone. It’s the ERP app for Veritas. Does the pub-where-you-were-conceived have a wireless network?
“Er... yeah it’s StJamesGate and the password is … er well let me just enter it for you here”
Within seconds, Kat’s fingers were dancing across the glass surface of the phone and in less than a minute...
“Alright then – all relevant boxes are now unchecked which means that it’s physically impossible for those drums to leave the shipment holding area without basically taking out a wall – which I don't think our nightshift is going to do so… so now what John?”
Kat smiled at him but it wasn't an entirely nice smile. There were elements of a grimace to it
“Well, great, I think Kat. Right, I mean we can sort it out next week right? After New Year’s?” he ventured hopefully.
“Well, John, what’s now is that within some number of hours I’m going to catch holy hell which I’ll promptly pass along to you because without that shipment tonight, the year’s sales don't reach the magic number and the execs on the 3rd floor don't get their ridiculous bonuses and Flannery Jr. doesn't get his truly obscene payout and Stella-Heinz-Rickenbacker-Flannery doesn't get her pink Lambo. Actually, I’m kidding about that last bit. It’s probably not pink, but the rest is true and that’s the downside of me having time to read and not enough work to do. I just know this stuff. So – now what John.?”
We’re leaving Babylon
“We get over there Kat, back to Veritas, pull the raw analysis data out of the control room archive and see what that batch really came in at – 93.5 or 98.5. Then er… then we’ll see for sure what happened. Get us an Uber Kat, eh? I know this is maybe not the date you envisioned, but you’re with me, right?
“I guess, John. 5 minutes out front”
And we’re going to our father’s land
Snow had started falling and the Veritas plant parking lot looked quite beautiful, coated a perfect, crisp and even white. Inside the control room John and Kat made an unlikely pair of heroes with green hair and the smell of pubs and Paco offending the sober senses of the night-shift team. Nonetheless, they seemed to be getting somewhere when the sweet odor of champagne, Chanel and cigars invaded the space, followed by a teetering Stella and a Lurching Vincent Flannery Jr.
“What the fuck?” Flannery asked the room in general
Silence ensued, then...
“Hello Mr. Flannery” Kat spoke flatly, guessing correctly that the Bonnie and Clyde in fur, Louboutins, diamonds and tux were the same Flannery’s she’d just learned about from John.
“OK – so who the fuck are you and what the fuck... are you doing with the China shipment?” Flannery menaced.
Kat stared at him. She’d been talked to like that all her life and knew by now that the fight and the flight options were never the best response. Nor was the often-useful crying. Still, it was hard to control biology and evolution and she felt tears push hard behind her eyes as she clenched her thumbs inside her fists. But the flat voice didn't fail her.
“Mr. Flannery. The ERP system is showing an inconsistency with the analysis for this batch and so the barcoding won’t let it out of the plant. John here, brought me over to determine if this can be addressed this evening. I’m Kat by the way, from accounting”
“Yeah I know” Flannnery seemed a bit put-off by the absence of fight, flight or crying “But you see, Kat-from-accounting, my good customer in China really needs this very important shipment of H-104 to go out tonight. “
“erm It’s going to Taiwan, Mr Flannery and it’s H-105 for Eva Air for airplanes” John tried to interject matter of factly.
“OK right – Tie-fucking-One and they need to keep the fucking planes flying so let’s get this shit outta here now!” Flannery got back into his groove bullying John.
“Right well, I was working here this afternoon with Karl and…”
“Oh – my idiot brother-in-law- why am I not surprised he’s involved” Flannery scoffed.
“and” John continued “I’m concerned that the right analysis for the H-105 was not entered into the C of A by... er… me so I asked my colleague here in accounting to pause the shipment until the uncertainty could be resolved – which is what we’re doing here”
“Smart boy” giggled Stella. Flannery glowered, promptly ignored John, and turned back to Kat.
“Well if the green goddess here can pause the shipment, she can certainly un-pause it, which if she does in the next... hmm... 9 minutes, there’s a very nice year-end bonus in it for her and for you all – if she does what she needs to do. If not, well you’re all fucking fired – so get to it Katey” Flannery stared somewhere off to the left of Kat, not daring to lock eyes.
“Of course, sir. I can easily un-pause the shipment, as you say, by checking and verifying the analysis in the system with the number on the C of A and that should take, oh about 10 – 20 minutes.” An even deeper silence ensued as Flannery’s champagne addled intellect grappled with the seeming fact that, as 10 – 20 was a greater number of minutes than the now, 8 minutes in which the Interfreight pickup window would close, his obscene year-end payout would be significantly less obscene than planned and his wife’s Lamborghini would just have to wait one more year.
“Guys, I don't understand. What happens if you just ship the drums” asked Stella, rather innocently, in John’s opinion.
“Mrs. Flannery” began John “Stella, darling... call me Stella”
“Er... Stella” John looked sideways at Flannery and continued “If the analysis is wrong and we ship the drums and they are used in an airplane lubricant system, something could go wrong with the plane and then it might crash and all those people, mams and dads and kids would be gone –because of us - because of me”
“Vincent darling – this young man and his colleague are trying to save lives so what’s the harm if we wait another few minutes. Daddy will hardly mind if we’re a little late for his party...?”
Flannery couldn't figure out if he’d been checkmated by his wife or the green-bitch or were they working together. Any case…
“Fine. Fuck” he growled. Which everyone took to mean go head and pull the records and make the comparison.
Time passed as it should. Interfreight came and left, without the drums. Flannery’s blood pressure went beyond boiling point and Stella found a fifth of bourbon in the back of the limo which she shared with Kat. More snow fell. They gathered back in the control room.
“It’s 98.5” said John and he couldn’t decide whether to be elated, because Karl hadn’t lied, or dejected because he, John, was an idiot.
“But the display, I can see it even now, it said 93, I swear. I don't understand” He looked forlornly at Kat.
“Well obviously” said Tommy, lead night operator. “The display’s fucked – sorry Mrs. Flannery – but it is. If you look at it from over there, he waved left, 8’s are 3’s and 0’s are 1’s and from over there, he waved right, it’s just dots. You can only read it from right in front – and even then, you know, you really can’t trust it can you? Should have been replaced months ago but no-one listens to the nightshift so…” he glanced from under his eyelids at Flannery.
“So, I’m not crazy?” concluded John with relief.
“Oh, you’re crazy alright” began Flannery “and…”
“And, darling… these lovely young people, Kat and her boyfriend, did a wonderful thing to avert a potential plane crash and you must be very proud they work for you!”
Boyfriend – John liked the sound of that.
“So let’s celebrate Darling. You’ll buy me that Lambo you promised, and you’ll pay for Kat’s MBA she’s been talking about and erm get John whatever he wants – and these fine nightshift people! Wonderful!”
“That’s OK, Mrs. Flannery. We don’t need anything” Wait what ? I need something, thought John. “I’m just pleased that John here didn't want one mistake to build on top of another and the ultimate horror to result. Just knowing that he thinks that way and acts on it and that now we are still only not even half-way through a date, well that’s more than enough for me.”
Alright. I actually don't need anything because right there, what Kat just said, that’s all I need, thought John
“OK green goddess let’s go then. We’ve got a date to finish. I think we were discussing a Thin Lizzy song…?”
~The End~
The News
First up – do you guys read the Indian Chemical News? (https://www.indianchemicalnews.com/) . I started getting their emails about a year ago and didn’t unsubscribe. You get some decent snippets each day and a fair bit is surfactant related. For example the published recently that :
Indorama Ventures Public Company Limited (IVL) [the new proud owners of Oxiteno – although I don't think the deal has officially closed yet ] has opened its new 10,000-square-foot office and technology center at Marwah Center in Mumbai. The new facility is part of the company’s high-growth Integrated Oxides & Derivatives (IOD) business segment [that’s the part that acquired Oxiteno], serving global customers in India and the Asia-Pacific. Alastair Port, Chief Operating Officer - IOD business, Indorama Ventures said, “IVL is committed to growing our IOD business sustainably in India and Asia-Pacific and this new business and technology center in Mumbai is a key driver. Having support functions as well as an R&D center under one roof in the heart of Mumbai is convenient for customers to collaborate with us to create better solutions.” The new R&D center is the company’s hub for the Indian Subcontinent and SouthEast Asia to develop products supporting downstream markets, such as home, personal and industrial care and cleaning, agrochemicals, energy, lubricants, mining, and coatings. The center will also work closely with IVL’s global R&D team to exchange information and accelerate product development cycles. The business’s commercial and technical functions, including supply chain, finance, sales, and R&D are integrated at the new facility. The integration enables closer collaboration across functions and faster improvements to address changing customer needs. Indorama Ventures Public Company Limited portfolio comprises Combined PET, Integrated Oxides and Derivatives, and Fibers.
Of course, most of our news comes, as always, from the great folks at ICIS Chemical Business. You should subscribe, as I do. That was a not – so – subtle promotion for my conference partners, I know. But I wouldn't have produced 11 years-worth of surfactant conferences with them, if I didn't think they were a quality shop. They are. Join us in May, in person, in Jersey City, in person (did I mention that). The event launches soon, so stay tuned and also let me know if you you would like to present. If you think you could be the next Martin Herrington (hard to imagine, I know), then let me know.
More news, from ICIS. : The year in oleo could not have ended with a more appropriateheadline – “No end in sight for European fatty acids, fatty alcohols tightness”. The article, by the talented and informed Samantha Wright, goes on to report that:
European fatty acids and fatty alcohols are expected to face further shortages and strong demand through the first and second quarters of 2022. Ongoing logistical issues are likely to continue and players face fresh fears over rising COVID-19 cases. In the European fatty acids market, the tightness that has plagued the market for most of 2021 looks likely to continue into the first quarter. In the palm-based market, players are already negotiating Q2 contracts amid ongoing shortages.
Palm oleic acid has been very tight throughout 2021 and there are no indications that tightness will ease in the first quarter or even in the second.
Most palm-based producers are already sold out of oleic acid for the first quarter. Supply constraints have been caused by a combination of vessel delays, high freight costs from Asia and stronger demand amid tallow shortages. [interesting – I don’t recall reading about that recently. Although Tallow seems to have gone through the roof along with other commodities] The vessel delays are expected to last through the first half of 2022 as coronavirus-related logistical issues continue. Palm stearic acid availability was becoming more balanced towards the end of 2021. While there may be some tightness at the beginning of the first quarter as demand picks up following the holiday period, overall palm stearic supply is likely to be fairly balanced for the first and second quarters. Tallow-based material is still very tight, with oleic acid supply shorter than stearic acid. The tallow-based shortages arose from a lack of meat production combined with strong demand from the biodiesel industry for raw tallow. While meat production increased slightly in the second half of 2021, there were still low slaughter rates. This saw some increase in the fourth quarter, with December a typically strong month for meat demand. However, demand from the biodiesel market remained very firm, and there was very little additional tallow material seen in the fatty acids market during the fourth quarter. This is likely to continue into the first quarter and even into the second quarter, and could be a structural issue in the tallow market if slaughter rates do not increase to a level where biodiesel and fatty acids demand can both be fulfilled. Demand for all grades is expected to be stable at firm levels throughout the first and second quarters.
There may be an uptick in buying interest in January as players look to restock following the new year, but overall demand should be steady as all applications in the food, cosmetics and personal care industries are currently healthy. One source said: “I think production is pretty good… when you look at demand in general it is also very good. I do not see [tightness] easing unless demand reduces, which we do not think will happen.” Automotive demand is currently set to remain healthy, though there are ongoing concerns that increasing COVID-19 restrictions in Europe could cause a drop in activity again in several industries, including the automotive sector. The European Commission announced in the fourth quarter that it had launched an anti-dumping investigation into fatty acids from Indonesia. The probe is expected to last for the whole of 2022, so it is unlikely there will be any direct impact in the next year, but players will be keeping a close eye on the proceedings.
In the European fatty alcohols market, shortages are set to continue through the first quarter. The market has faced tightness throughout 2021 amid vessel delays from Asia, logistical issues within Europe and high freight costs. Supply constraints are expected to remain in the first quarter and possibly into the second. Vessel delays are not likely to improve in the first half of 2022. One source said: “Vessels are supposed to be arriving in February and they are not even on the water yet. There are [still] hiccups in the supply chain, definitely.” This is compounded by very strong demand from the downstream surfactants and end-use detergents markets. Players are expected to have firm buying interest in January as they look to build stocks after the year-end destocking. This is likely to be even stronger than in previous years as some market participants are looking to build stocks in case there are further coronavirus-related issues in 2022. “I believe people intend to produce whatever they can produce in order to have material ready before wave number five hits and they are forced to lock down again,” said a source. There are coronavirus-related issues with the palm oil complex in Asia that are causing issues for producers securing feedstock and are expected to continue into 2022. It is unclear yet if there will be more logistical issues in Europe during the first quarter if COVID-19 restrictions tighten, but ongoing concerns over a lack of truck drivers are likely to continue.
After selling its North American surfactant business to Indorama (who soon thereafter gobbled up Oxiteno to form a major surfactants player), Huntsman is back on the deal trail again (as if they are ever really off of the trail). ICIS reports that Huntsman is considering selling its Textile Effects division as part of a strategic review of the business. Huntsman will start the review early in the first quarter of 2022, the company said. The division is based in Singapore. Huntsman does not have a timeline or deadline regarding when it could finish the review.
Huntsman expects the division will report nearly $100m in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in 2021, the company said. The division makes dyes and textile chemicals used in pretreatment, colouration, printing and finishing. Huntsman operates 11 synthesis and formulation production sites in Asia, Europe and the Americas. Raw materials include amines, ethoxylates, acrylics and sulphones. In 2020, Textile Effects accounted for 10% of the company's revenues and 5% of its adjusted EBITDA. Huntsman's other divisions include Polyurethanes; Performance Products, which makes amines and maleic anhydride (MA); and Advanced Materials, which makes epoxy resins and curing agents.
Meanwhile over in Asia, ICIS reports that The Asian and south Asian linear alkylbenzene (LAB) market actually drifted lower in the fourth quarter of 2021 as demand as a whole failed to ignite. With the new Omicron COVID-19 variant now threatening to disrupt economies once more, sentiment among LAB players remains cautious. The slump in energy prices towards the end of 2021 and the Chinese government’s efforts to combat inflationary forces and curb power costs also weighed on the LAB market. Buyers adopted a cautious stance and bought on a need-to basis. Some suppliers held on to their offers but gave discounts for deals, while others focused on their own domestic markets at the year-end, citing soft demand in Asian export markets. Maintenance shutdowns in China were completed by November, but suppliers mostly continued to focus on the local market, citing tepid buying interest in Asia and India. However, some Chinese parcels could still find their way into Asia in the weeks ahead, especially after local Chinese appetite has been satiated.
In India, local demand perked up in November after the Diwali festivities in early November, but buying momentum fizzled at the end of the year. Buyers anticipated a weaker market from weak upstream energy and benzene markets, and kept mostly to the sidelines. Supply seems likely to dictate the tone of the market in 2022, as demand appears little changed. Even with Asian economies easing pandemic restrictions and initiating global vaccinated travel lanes, the expected pick-up in usage of cleaning solutions in the hospitality and aviation/transportation sectors is perhaps counter-balanced by people’s acceptance of living in an endemic COVID-19 situation, with appetite for hand sanitizers and cleaning liquids down from the earlier part of this year. Nevertheless, planned turnarounds in the fourth quarter of 2021 and the first quarter of 2022 are expected to keep supply in check across the region, while providing some support to the market. The wild card could be Chinese supply, which - though limited in late year - could become more abundant in the first quarter as output stays high. This may be especially true post Lunar New Year in early February, when LAB plants in China come back from the holidays in full swing.
Meanwhile, with the new COVID-19 Omicron variant starting to make its way through to Asia as well, a possible re-imposition of restrictions sometime in the first half of the new year will again be a dampener on demand. Potentially lower upstream markets from this deflationary economic bout could exert downward pressure on the LAB sector, as relative demand-supply goes out of balance. The elevated freight market, which looks likely to prevail into the new year, will continue to hinder a good portion of the arbitrage play of Asia suppliers trying to move volumes to destinations outside the region, such as Europe, in a bid to capture a higher value market. Consequently, any excess cargoes will likely remain within the Asian region and add to overall availability.
The year in Fatty Alcohols ended with may supply chain woes as outlined by the great Lucas Hall at ICIS. He notes that : Freely-negotiated US Q1 fatty alcohol contract negotiations have largely been finalised against the backdrop of bullish cost pressures and worsening supply chain constraints. Freely-negotiated contracts for standard balance material have largely been heard at a 30-50% premium from their Q4 settlements, with Mass Balance (MB) material largely heard at a 30-50% premium over standard balance material.
Short and long chain single-cut alcohols are particularly tight. Overall production costs remain bullish despite a moderate downward correction in feedstock costs across the oil palm complex in recent days associated with year-end inventory balancing. Vessel space is tightening against the backdrop of soaring freight costs, with shipping companies informing southeast Asian exporters they are no longer taking booking for January. This will defer containers that have amassed in ports throughout the region to February or later, further delaying imports. Current lead times for container shipments are at a minimum of three to six months.
Long chain alcohols are largely imported in containers. Few suppliers have the ability to process and store long chain alcohols in bulk, further supporting the market.
Malaysia's palm oil market remains fundamentally tight, with lower import taxes in India, adverse weather conditions in southeast Asia and the resurgence of the pandemic with the rise of the Omicron variant of the coronavirus all expected to pressure costs in Q1. The premium on palm kernel oil (PKO) because of the above pressures - in addition to growing concerns regarding the traceability of sustainable volumes in Malaysia - may continue to discourage PKO consumption for oleochemicals production, adding to the pressure. Increased scrutiny against Malaysian-origin material over forced labour allegations remains a major concern, as the traceability of Roundtable on Sustainable Palm Oil (RSPO) MB-certified material becomes more difficult, supporting higher premiums for MB PKO for oleochemicals production.
As a result of these cost pressures, many southeast Asian oleochemicals producers are planning maintenance during and after the Lunar New Year, further tightening the market. Domestic US fatty alcohols production capacity, as we know, is insufficient to make up for the import shortfalls against the backdrop of similar supply chain constraints, further supporting the market. Downstream demand in many end-markets remains pent-up because of continued supply chain disruptions, with many players working on an as-needed basis to fill backlog demand for the foreseeable future. Downstream surfactants price increases remain on the table with little to no pushback from customers.
Prices have largely been heard at a 30-50% premium from their Q4 settlements, based on market feedback. Long chain alcohols in containers have been heard much higher, given persistent and worsening supply chain constraints in that market. Contracts increasingly include terms subject to changes in freight and demurrage costs, given these constraints. Some players have less volume available for their traditional quarterly contract customers, as they prioritise inventory-building and annual contract customers over smaller volume customers ahead of upcoming maintenance and ongoing supply-chain disruptions globally.
Q4 contract ranges*
| Product | Price (cents/lb) | INCO | Location |
| C12-C15 | 97-112 | DEL | USG |
| C16 | lower 110s-140s | DEL | USG |
| C18 | lower 110s-140s | DEL | USG |
| C16-18 | 114-134 | DEL | USG |
*The prices in the table represent a range of settlements for standard balance material heard throughout the quarter for the majority of market participants. Prices above and below those listed in the table were heard throughout the quarter but excluded as they were not viewed as representative of the wider market.
Prices for synthetic [petrochemical] alcohols were heard at both ends of the above ranges amid the ongoing force majeure at Shell's Geismar site. At least one buyer settled its Q4 C16-18 contract below the $1/lb DEL (delivered) US Gulf (USG) range. The same buyer settled its Q4 C18 contract below the $1/lb DEL USG range. In the wider market, multiple producers have switched their contract terms from a DEL to an FOB + freight basis or to terms subject to changes in freight and demurrage, given the ongoing shipping logistics constraints.
US Surfactant bellwether, Stepan [hmm I don't think I’ve used that phrase before. It sounds right though] - So - US Surfactant Bellwether, Stepan announced a full slate of price increases, which it is probably useful to list here. So, as ICIS reported: Although the announcement did not cite a reason for the increases, demand for surfactants into cleaning supplies is expected to increase with the emergence of the Omicron variant of COVID-19. In addition, demand from oilfield activity remains strong amid elevated crude oil and natural gas prices. In addition to the product price increases, Stepan seeks a separate 1.5 cent/lb transportation increase. Transportation costs throughout the US supply chain have risen sharply, due to insufficient trucks, railcars, and containers; high gasoline prices; and labour shortages.
Stepan seeks price increases for surfactants in the following product categories: [Take a look. There are some very wide ranges there – note on the dry products and on some of the smaller volume items like phosphate esters, amides and betaines. ]
Product Category Price
Increase ($/lb) Alkyl Benzene Sulfonic Acids $0.03 Alkyl Benzene Sulfonates and
Dry Sulfonates $0.03-0.11 Short Chain Alcohol and
Ether Sulfates $0.075-0.09 Lauryl Alcohol Sulfates and
Dry Sulfates $0.09-0.26 Low Active Alkyl Ether Sulfates $0.07-0.11 High Active Alkyl Ether Sulfates $0.10-0.16 Ether Sulfates - Phenol $0.07 Olefin Sulfonates and
Dry Olefin Sulfonates $0.03-0.10 Sulfonated Methyl Esters $0.11 Hydrotropes $0.04 Amides $0.08 - $1.19 Betaines, Sultaines and other
Amphoterics $0.14 Amine Oxides $0.14 Sulfoacetates $0.26 Sulfosuccinates and
Sulfosuccinate Blends $0.09-0.23 Methyl Esters $0.05-0.84 Biocidal, Industrial and
Cosmetic Quats $0.03–0.21 Softeners $0.06-0.22 Phosphate Esters $0.05-0.57 Alkoxylates $0.015-0.18 Specialty Polyesters $0.02-0.08 Specialty Esters $0.03-0.61 Transportation $0.015*
*Note: Price increase is
independent of and in
addition to any
increase above
Blends and derivatives of these products are also subject to the increases.
Finally some news from a bunch of companies that we don't normally talk about here. US specialty chemicals company Polyventive has acquired the surfactants and dyes and pigments businesses of Canada’s Tri-Tex from SK Capital Partners for an undisclosed sum. The acquired businesses, with plants in Quebec, Canada and Los Angeles, California, produce surfactants, dyes, pigments, and water-based polymers used in textile, personal care, cleaning and industrial applications. Polyventive is a portfolio company of Arsenal Capital Partners. In a related deal, another Arsenal company, Meridian Adhesives Group, on Monday acquired Tri-Tex’s adhesives business.
So that’s it. Happy New Year to all my great readers. I love it when I hear from you about something you’ve read here. So please feel free to get in touch. You know how. I will see many of you at ACI in Orlando at the end of the month and of course in May in Jersey City.
I guess, it wouldn't be a surfactant blog if we didn't end the year with some music. So what am I listening to these days? Thin Lizzy of course. Here’s the aforementioned Emerald.
It’s inspiring but still a little disturbing with the lyrics no? Just like the Passover story.
And here’s the gorgeous Parisienne Walkways with the legendary Gary Moore on guitar. Oh man..I really can’t think of anything more French than this.
And check this out. It’s Ted Nugent introducing the band playing live at the Rainbow in 1978. The crazy thing is, if you listen carefully, Nugent introduces this great Irish band as “London Boys” Ugh…They play on regardless.
Of course, we have to include this high-point of the movie Eddie the Eagle
And finally, who hasn't been to an Irish pub and sung along to this one? Wait what - You haven’t? Get out there man…!
And finally finally, I just listened to this one from the ’73 album Vagabonds of the Western World. Remember this? The Rocker. Serious guitar break..
Happy New Year!