FocusAsia glycerine dips on ample supply, selling

24 April 2008 05:42  [Source: ICIS news]

By Jeremiah Chan

SINGAPORE (ICIS news)--Asian refined glycerine values are softening due to comfortable supply and a spate of panic selling, producers and traders said on Thursday.

Refined glycerine prices were assessed at $1,680-1,750/tonne (€1,058-1,103/tonne) FOB (free on board) SE (southeast) Asia for drummed cargoes on Wednesday, $70-150/tonne lower than values heard one month ago, according to global chemical intelligence service ICIS pricing.

“You can get glycerine very easily in Malaysia now,” a glycerine trader based in southeast Asia said, pointing out the stark contrast from the snug supply situation seen in the last quarter of last year.

Despite sporadic offers still reported above $1,800/tonne FOB Malaysia and Indonesia, most southeast Asian sellers admitted that prices above $1,750/tonne could no longer be easily achieved.

Competitively priced refined cargoes from crude glycerine imports into the region weighed on prices, they explained.

Crude glycerine imports from biodiesel producers in south America and Europe to Asian refineries eased the tightness in supply, as less discerning end-users who previously made use of refined cargoes of 99.7% purity switched to readily available lower priced crude material.

The abundance of glycerine refining capacities in the region also encouraged the influx of crude glycerine.

Several biodiesel plants in the region - hard hit by sharp rises in feedstock vegetable oil values - stopped production to concentrate solely on crude glycerine refining.

Offers of crude glycerine with 80% glycerol content from south America were heard at around $800/tonne CFR (cost and freight) SE Asia this week, although refiners felt that such prices were too high to accept.

Most producers pointed out that sellers and traders who had earlier stockpiled cargoes during glycerine’s dramatic price increase over the past year found themselves saddled with material.

Eager to lock in profits before prices fell further, they dumped their cargoes in the market, resulting in a supply overhang in the region.

Major glycerine producers in Asia include IOI Oleochemical, Proctor and Gamble, Acidchem, Kuala Lumpur Kepong (KLK) and Musim Mas.

($1 = €0.63)

By: Jeremiah Chan
+65 6780 4359

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