Europe tallow glycerine hits 29 month high - broker

17 July 2007 16:59  [Source: ICIS news]

LONDON (ICIS news)--European tallow glycerine prices have reached a 29-month high due to increasing tightness in upstream biodiesel, a broker said on Tuesday.

The source said it had sold ten trucks of technical grade material for €550/tonne ($753/tonne) FD (free delivered) NWE (northwest Europe) for delivery next week, the highest price reported since February 2005, according to global chemical intelligence service ICIS pricing.

After having fallen steadily for two years, tallow glycerine prices rebounded in April this year. This was due to the tightness caused by reduced production in the upstream biodiesel market.

The upward trend has lasted throughout the past three months, although some say product is so tight that it has become hard to speak of a tallow spot market.

There has been some discrepancy among market participants as to how long the extreme tightness will continue. While some say it could persist for as long as two or three months, one source said it would be four-to-six weeks.

“The new oil crop will come in soon and we will start to see more biodiesel in the market," one trader said.

“If refined glycerine goes up any more, biodiesel producers might start to see there is money to be made downstream”, it added.

Biodiesel supply across Europe has been restricted due to reduced production, particularly in the German market, where increased tax on the product has forced some sellers to cut back.

Tallow glycerine is principally used in the manufacture of polyols and alkyd resins.

($1=€0.73)

 

By: Charles Shaw
+44 20 8652 3214

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