In the APAC region, the Global LABSA market exhibited mixed trend influenced by varying end-user demand and the availability of the commodity. In South Korea, prices experienced a downward trajectory by around 3.5% in Q1 2024 compared to Q4 2023, reflecting a combination of reduced demand from key sectors and increased inventory levels that led to a surplus in the market. This decline suggests a temporary easing in the urgency for procurement as manufacturers recalibrated their production schedules in response to market conditions. Conversely, the price dynamics in China showed a more optimistic trend, with prices rising by 4% during the same period. This increase was attributed to stronger end-user demand, particularly from the detergent and personal care industries.
In Q2 2024, the Asian LABSA market experienced significant price fluctuations due to changes in consumer demand and inventory levels. In China, prices dropped by about 2%, reflecting a slight decline in demand as manufacturers adjusted their purchasing strategies in response to higher stock levels and shifting consumption patterns in end-user sectors. In contrast, the North American market faced challenges, with LABSA prices falling by 7% compared to the previous quarter. This decline was due to weakened demand from key industries, as manufacturers dealt with excess inventory and rising production costs, leading to a more cautious procurement approach. Meanwhile, the European market showed a more positive trend, with pricing fundamentals improving significantly and LABSA prices increasing by approximately 8% during the same period.
At the outset of Q3 2024, the price of LABSA exhibited a downward trend in the APAC region. This trend was influenced by several key factors, including inadequate cost support from the feedstock LAB market, as the prices of raw material LAB declined, further reducing production costs and resulting in a bearish market outlook. Conversely, in Europe, prices remained stable during the first month of Q3 2024, attributed to a narrow gap between demand and supply. Following the decline, the price of LABSA FOB Shanghai is currently approximately USD 1354 per metric ton.
In Q4 2024, the global LABSA market is likely to experience more pronounced seasonal effects, particularly in the Asia-Pacific and North American regions. In Asia, a sustained recovery in demand may lead to a stabilization or slight increase in prices, especially in China, where consumer trends are expected to strengthen during the holiday season. South Korea may also see a boost in demand as end-users replenish inventories. In Europe, the positive momentum is expected to persist into Q4, driven by consistent demand from key sectors. Prices may continue to rise, particularly if supply constraints remain in place.