26 March 2008 04:54 [Source: ICIS news]
By Jeremiah Chan
Earlier offers from producers in Malaysia and Indonesia at or above the $1,900/tonne (€1,216/tonne) FOB (free on board) SE (southeast) Asia mark failed to find takers as buying sentiment continued to weaken.
Offers this week for drummed cargoes were heard at around $1,850/tonne although traded volumes were low.
Glycerine values have been going up since last year, as surging upstream vegetable oil prices pulled the plug on biodiesel production in the region, and consequently tightened the previously ample supply of cheap crude glycerine as demand grew.
Lower demand for oleochemicals due to the price hikes brought upon by the high raw material prices also reduced the availability of refined glycerine in
Reduced supply, coupled with higher glycerine demand due to the advent of new applications for the product, led prices to more than triple from a year earlier, when refined cargoes were traded in the low-$600s/tonne, according to global chemical intelligence service, ICIS pricing.
Glycerine is a by-product of biodiesel, soap and oleochemical production, and has a variety of end-uses in pharmaceutical, cosmetic, foods, tobacco and industrial applications.
Upside, however, has been capped in recent weeks as lower-priced imports of crude glycerine cargoes from Europe and the
“I have lowered my offers to [by $50/tonne] to $1,850/tonne FOB, as I can no longer move material at $1,900/tonne,” a Malaysia-based distributor of Indonesian oleochemical glycerine said in Mandarin.
“I lost a deal last week when my customer in the
Other sellers echoed this sentiment, with other marketing officials from various Asian oleochemical majors agreeing that further upside have been capped.
“Biodiesel production has picked up in Europe, and some 80% crude glycerine is going into
Competition from such cargoes have weighed on prices, he added. “You can no longer sell glycerine at $1,900/tonne [FOB SE Asia] today,” he said.
Still, some producers in the region were adamant on maintaining their higher offers due to low inventory levels.
“We are still very tight for glycerine, and we do not intend to dump any of cargoes [at lower prices],” the marketing executive of a major oleochemical plant in
He added that their offers would be maintained at $1,900/tonne FOB
Major glycerine producers in
($1 = €0.64)
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