The fatty alcohol market is primarily dominated by Indonesia and Malaysia, which together account for about 80-85% of global production. However, other significant contributors include the USA, Netherlands, China, and Brazil, which also play vital roles in manufacturing fatty alcohol. In the first quarter of 2024, prices in Indonesia hovered around USD 1,600 per metric ton due to production disruptions in Southeast Asia. Extreme weather events and logistical challenges significantly impacted output, creating notable production constraints. Despite these setbacks, demand from essential sectors such as personal care and cleaning products remained strong.
As we entered the first half of Q2 2024, the market continued to contend with production challenges stemming from adverse weather and logistical issues. However, demand from the personal care and cosmetics industries had stayed robust, with a 3% increase in consumption reported. By May 2024, prices had begun to stabilize as supply dynamics improved, allowing for a gradual recovery in production and easing previous price pressures.
In the third quarter of 2024, upward price pressure has persisted due to ongoing supply constraints and consistent demand from the personal care sector. The market has remained sensitive to global supply chain disruptions, including transportation issues and export restrictions, which have continued to shape price dynamics. As of August 2024, fatty alcohol prices have averaged around USD 2,000 per metric ton, marking a significant increase from the previous month. This fluctuation has reflected a complex interplay of persistent production challenges and resilient market demand.
Looking ahead to the fourth quarter of 2024 and beyond, expectations for a partial recovery in production will have become optimistic as weather conditions stabilize and labor issues are addressed. Nevertheless, the market will remain volatile through 2030, influenced by ongoing climate change effects, shifting trade policies, and evolving consumer preferences for sustainable and alternative products.