18 June 2008 10:48 [Source: ICIS news]
SINGAPORE (ICIS news)--Glycerine inventories in southeast Asia are continuing to build due to higher biodiesel production and slower demand, which could lead to a fall in prices to $1,000/tonne or lower, traders said on Wednesday.
"There are at least 2,000 tonnes sitting in Singapore tanks, and plenty of cargoes in Malaysia," a major Singapore-based oleochemical trader told ICIS news, adding that he could not fix cargoes recently.
Market sources pointed to the recent influx of low-priced crude glycerine from the US as one of the key factors in the recent inventory build-up.
The abundance of glycerine refining capacity in the region at biodiesel production facilities also resulted in plenty of available cargoes, traders said.
Even though some regional sellers continued to keep their offers high, most believed that the glycerine price spike seen just a few months ago had ended.
"It seems like glycerine prices are going to drop below $1,000/tonne FOB [free on board] soon," the marketing official from an Indonesian oleochemical plant said, as she pointed out that her offers at around $1,500/tonne FOB Indonesia this week found few takers.
Major glycerine producers in Asia include IOI Oleochemical, Proctor and Gamble, Acidchem, Kuala Lumpur Kepong (KLK) and Musim Mas.
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