US-China trade war creating side effects for global oleochemicals market

AMSTERDAM (ICIS)–The trade war between the US and China is already having side effects on the global oleochemicals market, industry sources said on Wednesday.

This side effect comes despite most oleochemicals not being directly impacted by the two countries’ trade tariffs imposed on each other.

While the export taxes being implemented by the US and China would only directly impact fatty acids being sent from China to the US, other oleochemicals are feeling the pinch from the escalating conflict, according to the president for North America at IP Specialities, an oleochemicals producer based in Ohio, US.

Martin Herrington (pictured) added that US glycerine prices have been under downward pressure from tariffs placed on soybean oil by the US against China.

Soybean oil is the main biodiesel feedstock in the US, of which crude glycerine is a by-product.

Taxes on ethoxylates are also indirectly affecting the oleochemicals market, other sources said.

Ethoxylates are a key component in surfactants, as are fatty alcohols.

China has become in the last few decades the most important player in the surfactants global market.

The industry players were speaking at and on the sidelines of the 7th ICIS  Surfactants Conference, taking place in Amsterdam on 19-20 September.

The main use for fatty alcohols lies in the detergents industry – laundry detergents, shampoos and shower gels – as well as in cosmetics and pharmaceuticals.

Oleochemicals are chemicals derived from plant and animal fats which, after various enzymatic and chemical reactions, can form basic substances like fatty acids, fatty acid methyl esters, fatty alcohols, fatty amines and glycerols.

Oleochemicals are analogous to petrochemicals, which are derived from petroleum instead of plant and animal fats.

Pictured: Detergent pods, an end market for oleochemicals via fatty alcohols 
Source: Kris Tripplaar/Sipa USA/REX/Shutterstock