The ongoing issues in the Middle East since February, the instability and humanitarian crises it has created, eclipse all the small problems in life, putting them all into context.
The ongoing issues in the Middle East since February, the instability and humanitarian crises it has created, eclipse all the small problems in life, putting them all into context.
That said, it’s creating an awful lot of problems for HI&I manufacturers and formulators: Chief among them is availability and costs.The effects of events that began on February 28th were swift to flow through to the HI&I ingredient supply chains. We’ve seen marked price increases and subsequent shortage of some pretty critical ingredients, not least LABSA, a core ingredient in many laundry detergents.
Especially galling as I just started a couple of high end laundry development projects where LABSA would have been one of my go-to primary surfactants.
Of course, I’m obsessing over the impact on LABSA, but it’s far from the only casualty. The current disruption reaches across the majority of ingredients, especially anything ethoxylated … that’s most of your non-ionics and good old SLES as well.
So, what’s causing the problems and how long is the disruption likely to last?
Well, as far as I can see we have three main areas of disruption:
- Firstly, Transport of critical intermediates through the Strait of Hormuz: obviously the back log after more than 4 months of severe disruption, not of surfactants specifically, but of critical intermediates and feedstocks (ethylene and sulphur derivatives, for example) is going to take a while to refill the supply chain once the Straights are re-opened. I’m guessing several months before normal supply chains are anything like back to normal. And the resumption of supply is going to be ‘lumpy’ with some materials taking longer to recover. In the meantime, there will be numerous industries squabbling over supplies as they come back on-line, with the resultant prolonged price hikes.
- Secondly, energy costs have increased significantly, and it goes without saying that our industry is an energy-hungry beast with manufacture and transport both disproportionately affected by increased energy costs. Again, a temporary but persistent driver of price hikes. How temporary? Well, if the Gulf War and the market’s response to April’s ceasefire are anything to go by, then this readjustment will not take months … maybe weeks. This will impact not only petrochemically derived ingredients but sustainably sourced materials such as APGs. These will not be immune because these too, depend on energy intensive processing and transportation. And obviously, this will disproportionately impact material travelling between continents. In this respect it’s a strong argument for the virtues of sourcing locally. (If only it was that simple!)
- Thirdly, and most concerning, damage to infrastructure. This is probably the factor which is going to drag aftershocks well into ‘27 and even ’28. LABSA’s precursors are n-paraffin, benzene and sulphur. N-paraffin and sulphur primarily products of refineries which have been deliberately targeted, and which in some cases will take years to repair and commission. My initial interest in checking this stuff out was, obviously, LABSA but sulphur and sulphuric acid sit upstream of numerous anionic surfactants, including SLES and AOS.
Now, that’s a challenge to the formulator.
In the meantime, the HI&I industry needs to keep product flowing, which will call for some nimble footwork from formulators and suppliers. This will be especially challenging for performance sensitive areas like laundry.
Hopefully it will drive some interesting innovations and further champion the cause of vegetable / biologically derived ingredients. Maybe the opportunity that sophorolipids and rhamnolipids have been waiting for. Prolonged supply disruption is the mother of invention!
So, why have I written this? Am I just being all ‘doom and gloom’? No, I’m just trying to manage expectations: this is going to take a while.
But the bottom line is that we’ll get through.
We always do.