Europe Q3 fatty acids up on tallow fat market

09 July 2008 23:59  [Source: ICIS news]

LONDON (ICIS news)--Third-quarter contract agreements in the European fatty acids market were settled with increases, largely due to higher third-quarter tallow fat prices, buyers and sellers said on Wednesday.

Tallow stearic acid settlements were widely reported in €950-980/tonne ($1,484-1,531/tonne) bracket, up €50-75/tonne

One buyer reported settling Q3 business at €930, while a producer reported agreements as high as €1,000/tonne. As neither of these extremes was widely evident in the market, they were not considered representative.

Tallow oleic acid prices were reported in the range of €1,050-1,100/tonne by most buyers and consumers, representing an increase of €50/tonne.  

Sellers said that any spot business would be conducted above these levels due to continually firm tallow pricing. The tallow fat market was regarded as tight by most.

Sellers had been targeting significant increases in the tallow fatty acids markets due to significant upward movement in the upstream tallow fat market.

Buyers confirmed that contract increases agreed for the period were higher than anticipated due to unexpectedly firm tallow price evolution.

Most sources agreed that the price differential between vegetable and tallow based acids had more or less disappeared.

Triple pressed palm stearic prices were widely reported at €930-1,000/tonne, up €30/tonne at the low end, while top end prices were stable. While prices were assessed in this range, the majority of business did fall within a more narrow €930-980/tonne range.

Palm oleic prices were reported at levels of around €1,100-1,150/tonne.

Buyers said that if current upstream trends continue in the current vein (tallow prices on the rise while tropical oil prices fall), then the demand pattern in Q4 could shift in favour of vegetable-based fatty acids.

($1 = €0.64)

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By: Shelley Kerr
+44 20 8652 3214

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