14 September 2007 20:20 [Source: ICIS news]
By Judith Taylor
HOUSTON (ICIS news)--The US crude glycerine market is in a state of flux due to increased attention caused by a shortage of refined material, market sources said on Friday.
Refined glycerine supplies fell rapidly in the first quarter of 2007, following about 24-months of oversupply, market sources said. The sharp inventory reduction in refined material was largely caused by eroded ?xml:namespace>
There are numerous grades of crude glycerine and an absence of market alignment, buyers said. These factors, along with potential new demand, have put buyers on edge in trying to source material and discover how to better utilise it, sources said.
Traders were eagerly seeking crude glycerine to determine if the material might be refined to levels that would help meet growing demand factors, other sources said. New glycerine demand is opening on the back of upcoming operations for mono propylene glycol (MPG) production and expansion of polyols production.
“We’ll take any type glycerine we can find,” a trader said.However, it remained unclear if MPG production would require refined glycerine or if crude could be used in the new processes.
Crude glycerine is much lower priced than refined, typically quoted at about 6-7 cents/lb. The low end of refined glycerine is about 43 cents/lb for vegetable material and 41 cents/lb for tallow, according to global chemical market intelligence service ICIS pricing.
Biodiesel producers have sought to find outlets for co-product crude glycerine and been turned back by refiners because of the inherent risk involved in running any material with high residues through expensive evaporation equipment.
Crude glycerine is a co-product of biodiesel, soap-making and production of fatty alcohols and fatty acids in a 10:1 ratio for each process, producers said. However, the material is usually not refined due to high salt and residue contents, they added.Crude glycerine suppliers include most biodiesel producers, soap-makers and traditional fatty alcohol/fatty acid producers such as Procter & Gamble, Cognis Oleochemical, Dial, and Uniqema.
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