Stearic Acid Prices Rise in the US Amid Palm Oil Price Fluctuations and Transportation Disruptions

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Stearic Acid Prices Rise in the US Amid Palm Oil Price Fluctuations. Photo by: Special

PALMOILMAGAZINE, UNITED STATES – In the second week of June 2024, stearic acid prices increased by approximately 0.8% in the United States due to disruptions in sea transportation and fluctuating palm oil prices, primarily sourced from Southeast Asian countries like Malaysia and Indonesia.

According to ChemAnalyst, in May 2024, palm oil prices dropped significantly by about 9%, and this volatility continued into early June, raising concerns about stearic acid production costs. Malaysia’s palm oil stocks slightly increased by the end of May 2024, rising 0.5% from April due to a 14% month-on-month increase in crude palm oil (CPO) production, reaching 1.7 million tons.

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This peak harvest is expected to reduce stearic acid production costs and boost competitive exports from North America and Europe.

Also Read: The Health Benefits of Monounsaturated Fatty Acids (MUFA) in Palm Oil

Meanwhile, Indonesia’s palm oil exports in May 2024 were 1.72 million tons, a 4.2% decrease from April. However, the annual output is projected to increase by 5% to 57.6 million metric tons this year, attributed to mature plantations, according to the Indonesian Palm Oil Association (IPOA). This dynamic adds uncertainty to stearic acid production costs.

The crowded in crucial trade route around Asia, namely in Malacca Strait and port of Singapore, made supply chain disruption worse. It caused the increasing transportation tariff more than 50% and would have something to do with stearic acid price globally.

The latest market analysis showed that the spot tariff to container transportation within full size from Asia to USA and Europe would be increasing, more than US$ 6.000 for one unit equally to 40 feet (FEU) in the three main routes, such as, East China to USA eastern coast; East China to northern Europe, and every Asia. This would have something to do with transit costs to transport stearic acid to North America and Europe.

Though the challenges are ahead, stearic acid demands from downstream rubber industries keep decreasing. It happened for the electric vehicle selling which was stagnant in USA and Europe. In USA itself, electric and hybrid vehicle selling got decreased to be 18% of the total new medium vehicle selling in the first quarter of 2024, decreased to be 18,8% from the previous quarter, according to the data published by Energy Information Administration.

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It happened in European Union. The new electric car selling got decreased 12% in May 2024 to the previous period. It significantly got decreased 30% in Germany. The cut of subsidy by the early of 2024 contributed to decrease 16% electric vehicle selling this whole year, according to European Automobile Manufacturers’ Association (ACEA) that burdened stearic acid demands.

In a whole, stearic acid could be increasing in price. It happened for the increasing transportation tariff in Asia even though many are harvesting palm oil that could deliver pressures.

about Stearic Acid

As quoted from ingredi, stearic Acid is the general saturated fatty acid. Saturated means, if it is seen from carbon chain structure, there would be not many double bonds and it made saturated carbon and had many spaces to get hydrogen. Becoming saturated also means to be solid in temperature room.

These are the reasons why butter (in high saturated fat) is in solid form in room temperature, and cooking oil (normally unsaturated fatty acid) is in liquid form. Stearic acid and or palmitate is fatty acid that many consumes in food in European Union and USA.

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In general, stearic acid is not directly used as materials for food but it is indirectly used because its lubricant characteristic, emulsification, and softness. It is used to make candies. It can be used as the material as coating for chocolate products to be delivering different shine, and prevent to get attach one to another.

For stearic acid is easy to be produced and relatively cheap, it is used to many other interesting products. Sometimes it can be found in lead-acid battery to minimize oxidation, candle for the structure, oil, medicine, and even fireworks. (P2)

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