Chemical profile: Glycerin

25 February 2008 00:00  [Source: ICB]

DEMAND

2006: 455m lbs (206,000 tonnes) 2007: 465m lbs 2011: 505m lbs, projected. Demand equals production plus imports (2006: 164m lbs 2007: 198m lbs) less exports (2006: 45m lbs 2007: 50m lbs). Sources: ICIS Chemical Business USITC

GROWTH

Historical (2002-2007): 2.3%/year. Future: 2.2%/year through 2011. Source: ICIS Chemical Business

PRICE

Historical (2002-2007): High, 78 cents/lb, contract, natural, Gulf, refined, US pharmaceutical grade, contract price, nonkosher, 99.7%, tanks, delivered low, 31 cents/lb, same basis. Current contract: 73-88 cents/lb, same basis. High, 85 cents/lb, spot price, natural, Gulf, refined, pharmaceutical grade, contract price, nonkosher, 99.7%, tanks, delivered low, 27 cents/lb, same basis. Current spot price: $0.88-1.05/lb, same basis. Source: ICIS pricing

USES

Skin-care products, 25% food and beverages, 23% toothpaste and mouthwash, 16% tobacco humectant, 11% polyether polyols for urethanes, 9% drugs, 7% alkyd resins, 3% miscellaneous, including cellophane, explosives, plasticizers and lubricants, 6%. Source: ICIS Chemical Business

MARKET PERSPECTIVE

The personal care products sector is the largest application for glycerin, growing at 3%/year, as an aging "baby boom" generation consumes more skin-care creams. Good solubility, taste and lower pricing give glycerin an edge on sorbitol in toothpastes and mouth washes, and the oral care sector is growing at about 2%/year. Another strong performing sector is food. In 2007, food products consumed about 116m lbs, either as glycerin directly or as one of its derivatives, such as glycerol mono-­stearate. Glycerin in the food sector is growing at slightly better than 3%/year as a result of the continuing trend toward lowering the fat content in foods. These three sectors together represent 64% of glycerin's applications.

Glycerin's use in alkyd resins is shrinking at 1.5%/year, as alkyd resins have seen more competition from water-based acrylic and vinyl formulations. This is a result of the trend away from using organic solvent systems, due mainly to legislative control of volatile organic compounds in the atmosphere.

The beginning of 2007 opened with the refined glycerin market long, following two years of substantial oversupply. In the first quarter (Q1) 2007, prices were at benchmark lows, with refined vegetable glycerin in the low to mid-30 cents/lb on a delivered basis. Tight supply and increasing demand took control of the US market during Q3 and Q4. By the end of Q4, contracts for bulk delivered material were assessed at 65-76 cents/lb. Currently, contract pricing is 73-88 cents/lb and spot pricing is above $1/lb.

OUTLOOK

Forecast growth through 2011 is 2.2%/year, driven mainly by personal care and food products. Supply is expected to remain tight as glycerin is a by-product of saponifying vegetable oils into soaps or esters, which imposes a limit on crude glycerin available for refining. With the tight supply, pricing is expected to remain at historical highs.

US GLYCERIN CAPACITY, MILLIONS OF LBS/YEAR

Company	Location	Capacity
Chemtura	Memphis, Tennessee	30
CognisOleochemicals	Cincinnati, Ohio	65
Colgate-Palmolive	Morristown,Tennessee	20
Dial	Montgomery, Illinois	30
Dow Chemical	Freeport, Texas	140
Evonik Goldschmidt	Mapleton, Illinois	20
Ferro	Fort Worth, Texas	10
Marietta	Olive Branch,Mississippi	2
Procter & Gamble	Ivorydale, Ohio	160
Twin RiversTechnologies	Painesville, Ohio	20
Unilever Home & Personal Care USA	Hammond, Indiana	25
Uniqema	Chicago, Illinois	35
TOTAL		557

SOURCE: ICIS CHEMICAL BUSINESS

*Millions of lbs/year of refined glycerin. US-based Dow Chemical is the only producer of synthetic glycerin. Others obtain glycerin as a by-product in soap and oleochemical production, using natural fats and oils as raw materials, or as a by-product of biodiesel production, from transesterification of vegetable oils into methyl esters.

US-based oleochemical producer Twin Rivers Technologies is adding 88m lbs/year of refined glycerin capacity to its facility in Painesville, Ohio. Start-up is anticipated in May of this year.

Last month, US-based specialty chemical company Chemtura announced it was selling its oleochemicals business to US-based PMC Group, for an undisclosed amount, to help cut its debt. The transaction includes Chemtura's oleochemicals plant in Memphis, Tennessee, with its glycerin unit.

In 2007, US consumer products firm Colgate-Palmolive closed its plant in Jeffersonville, Indiana, US,and transferred production to a new facility in Morristown, Tennessee, US.

Cognis Oleochemicals is a 50:50 joint venture of Cognis and Sime Darby of Malaysia, formed in 2006. Last November, Germany-based Cognis said it was in advanced talks to sell its stake, to an unnamed strategic investor.

Dial is a subsidiary of Germany-based Henkel.

Profile last published January 25, 2005

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