Lead: This period has seen a bearish decline in the stearic acid market. Transaction prices for domestic Grade 1 stearic acid in East China were 10,000-10,200 RMB/ton, down 4% month-on-month, while mainstream imported stearic acid traded at 10,100-10,300 RMB/ton, also down 4% month-on-month. Although positive news regarding the raw material palm oil emerged during this period, its impact on stearic acid market prices was very limited, primarily due to a lack of demand.

1. Limited Cost-Side Support Leads to Stearic Acid Price Decline

On May 19, 2026, market sources confirmed the Indonesian government's plan to establish a state-owned export agency to centrally manage exports of bulk commodities such as coal, crude palm oil (CPO), and minerals. Exporters may be required to sell their products exclusively to this agency, which would then handle external exports. Following the announcement on the afternoon of that day, Malaysian palm oil futures surged 2.18%, while domestic 24-degree palm oil prices in the Zhangjiagang market rose 1.61% and 52-degree palm oil prices in Zhangjiagang increased by 1.78%. This external news directly supported domestic palm oil prices. While the rise in raw material palm oil provided some boost to stearic acid costs, market prices for stearic acid did not see any significant increase. Transaction volumes for domestic Grade 1 stearic acid remained weak. As of the time of writing, the mainstream transaction price for stearic acid was 10,100 RMB/ton, a decline of 4%.

2. High Domestic Raw Material Inventory Limits Impact on Local Market

This period's palm oil supply and demand data indicates a gradual increase in inventory. Four new cargo vessels were confirmed for domestic purchase: two for June, one for November, and one for December, totaling 48,000 tons. No new vessel cancellations were reported. Demand for palm oil remained sluggish. Inventory stood at 788,200 tons this period, up 4.26% from the previous period. Meanwhile, the operating rate of downstream stearic acid factories remained around 40%, and operating rates for other downstream product factories were also low. Consequently, gains in the domestic palm oil market were limited, and palm oil prices fell in the following trading session. As a result, cost-side support for stearic acid remained weak, keeping market prices at a low level.

| Product | Region/Grade | Current Period Average | Previous Period Average | Change | % Change | Unit |
|---|---|---|---|---|---|---|
| 52 Palm Oil | East China/Zhangjiagang | 9,132 | 9,144 | -12 | -0.13% | RMB/ton |
| Stearic Acid | East China/Domestic Grade 1 | 10,320 | 10,516 | -196 | -1.86% | RMB/ton |
| Stearic Acid | East China/Domestic Grade 3 | 10,020 | 10,216 | -196 | -1.92% | RMB/ton |
| Zinc Stearate | East China | 13,200 | 13,283 | -83 | -0.62% | RMB/ton |
| Calcium Stearate | East China | 11,100 | 11,100 | 0 | 0.00% | RMB/ton |

3. Stearic Acid Supply Sees No Pressure, But Margins Shrink