Why do fatty alcohol prices track palm kernel oil so closely, and what keeps them elevated?

Why do fatty alcohol prices track palm kernel oil so closely, and what keeps them elevated?
Fatty alcohol pricing is effectively a derivative of palm kernel oil, and the pass-through is strong. Industry data show fatty alcohol has moved almost in lockstep with palm oil, but with greater elasticity, widening the spread between the two. Chinese fatty alcohol prices climbed from around 9,600 yuan per ton in mid-2023 to roughly 21,650 yuan per ton by late 2024, a gain of over 100 percent. The structural case rests on three pillars: aging Indonesian palm plantations with replanting cycles of about eight years, higher export levies in Indonesia and Malaysia, and rising biodiesel demand under Indonesia's B40 mandate. Together these keep feedstock tight and fatty alcohol supported.