Market Insight
27 October 2025
Palm Derivatives
The palm wax manufacturing sector in October 2025 finds itself navigating a challenging environment marked by significant price inflation in its core raw material: Hydrogenated Palm Stearin (HPS). This instability is not organic to the refining segment but is instead being aggressively pushed by a surging upstream Crude Palm Oil (CPO) market, forcing buyers to quickly adapt their stockpiling strategies to minimize cost exposure. For a business to thrive amidst this, reliable sourcing channels and superior supply chain management are essential. Companies rely heavily on partners who can secure the highest quality feedstocks, often dealing with the intricacies of international palm derivatives trading. Tradeasia International has established itself as a reliable distributor by leveraging its global network, ensuring manufacturers receive consistent supply and price transparency even when the market is at its most opaque.
This commitment to smooth supply is vital when analyzing the latest price movements. As of Week 4, October 2025, the Free On Board (FOB) price of RBD Palm Stearin from Malaysia hit an estimated $1,019.50 per Metric Ton (MT), representing a 3.5% increase from the Q3 2025 average of $985.00/MT. This rise directly shadows the CPO futures market on the MDEX, which has climbed by 4.2% over the same period, driven by aggressive demand signals from key consuming nations like India and China. Curiously, the HPS-CPO refining margin has only slightly tightened by 4.7% to $71.50, a small decrease that confirms robust demand for the refined product and suggests refiners have little incentive to offer major discounts. As one industry expert noted, "The fundamental value of the palm kernel remains strong, ensuring its derivatives, including stearin, maintain a premium position in the global oleochemicals trade."
In response to these tightening dynamics, procurement managers are strategically moving to secure volumes against anticipated further cost hikes. Data indicates that European importers, preparing for the high-demand winter candle season, have increased their HPS procurement volume in October by an estimated 12,000 MT, pushing the month's total volume to approximately 95,000 MT. This pre-emptive buying is a clear signal of market expectation that prices will hold firm or increase through November. The pressure is further solidified by official reports forecasting a 2.5% decline in Malaysian palm oil output in Q4 due to seasonal factors. To avoid the costly consequence of stock-outs or last-minute purchases at peak prices, palm wax manufacturers must ensure their inventory levels are maintained above 15% of monthly throughput, treating HPS not merely as a cost, but as a strategic asset to manage production stability throughout the rest of the year.
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