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How the Filipino Typhoon Will Affect Surfactant Markets

The devastating typhoon that recently swept the Philippines exacted a tragic loss of life, property and natural resources. As we all participate in a global economy, the destruction of the coconut crop will have a longstanding effect on pricing of surfactants here in North America. 50% of the coconut harvested in the world comes from the Philippines and reports are that 25% of all coconut trees were destroyed. It takes 3 years for a newly planted tree to bear fruit, so that means a prolonged shortage for the years to come. The futures index has already risen $0.30/# for January 1st and will probably go higher. Most coconut users are protected quarterly, so these raw material increases will start being felt January 1st , but people will begin buying up reserves now. Apart from the common use of coconut fatty acid and hydrogenated coconut fatty acid in lubricants, it will directly affect our pricing on amides which will rise at least $0.15/# January 1st whether they are cocamide DEA or coco DIPA etc. We have not yet heard from our cocobetaine producer but expect similar news from them.

Coconut oil is comprised of 50% C12 and 20% C14—so anything lauric- or myristic- will be affected. That will include linear alcohol ethoxylates made out of coconut or palm kernel oil, ether sulfates, amine oxides, di coco quats (Carsprays) as well as coco sultaines and other amphoterics. This is only a short list; our chemist Pete is available to fill in the blanks if you have questions, but the message is there will be price increases and probably some shortages.

If these surfactant products are an important part of your business, contact your FBC representative today for further news and to help us secure you a reliable supply at a price that makes you smile.

Ethylene Oxide supply issues

This year, a number of North American ethylene oxide producers will take their EO plants offline for scheduled maintenance. As a major feedstock, EO supply affects numerous raw materials. A short list of items this may affect is: ethylene glycol, nonylphenol ethoxylates (e.g. NP-9), alcohol ethoxylates (Tomadol or Empilan products), and several more in the soap and detergent industries.

EO producers have coordinated with each other to minimize supply disruptions and to prevent multiple plants from being offline simultaneously, however, if these plant turnarounds do not all go smoothly and keep to their schedules, price movements and product availability may be exacerbated by unreliable EO supplies. Dow, Indorama and BASF are all scheduled to go offline and return by the end of June. We urge our customers to be prepared for situations such as this until the plants are all back online.NA_EO_Capacity

Why is the D-limonene price so volatile?

Of all the products in our line, D-Limonene by far has the most volatile price. This can play havoc with cost management efforts of blenders and manufacturers that use a significant portion of D-Limonene in their “citrus cleaners” or degreasers. A little over a year ago, the price reached record highs, and almost hit $5/lb.. Within months, we saw the price crash into the $1.50’s before resuming its ascent. A look at D-Limonene’s production process helps explain this historic price volatility.

D-limonene is extracted from orange peels discarded from juice production. It has grown popular due to its excellent solvency for cleaning and degreasing, as well as its environmental claims of being all-natural and biodegradable.

Because it is derived from citrus fruits, almost all D-limonene sold in the United States comes from either Florida or Brazil, depending on which of those places is “in season” at the time. Its citrus-based origin also explains the historic price volatility, as orange supply is vulnerable to innumerable weather and other natural issues. Hurricanes, early or late frosts, excess rainfall, drought, and plagues of locusts have all negatively impacted the orange crop at one time or another.

There really is no way to protect against fluctuations in the D-limonene price. Whenever a customer tells me that they are considering adding a citrus cleaner to their product line, I explain that D-limonene has some great cleaning and environmental properties, and I always caution them to make sure they can handle the roller coaster ride of D-limonene prices.

We hope this article helps you to understand why D-limonene prices can get so crazy. If the D-limonene price is causing problems for your business, be sure to call your FBC sales representative. We have ample experience in adjusting formulas that can reduce your dependence on D-limonene and would be happy to discuss it with you.