24 February 2009 16:50 [Source: ICIS news]
HOUSTON (ICIS news)--A contaminated batch of glycerine that arrived in the US could cause contract prices to spike in the second quarter, sources said on Tuesday.
US glycerine producers and traders said a shipment, apparently from Asia, arrived in the northeast during the past few weeks and proved to be contaminated. Sources said the cargo had 500-1,000 tonnes, but no one had a clear idea of what led to the contamination or who brought it in.
What was clear was that any tightening of an already constrained supply would cause pricing to jump.
“It’s pushing prices up,” one trader said. “A replacement cargo is on its way, but it won’t get here until mid-March.”
Most sources said the unexpected drop in supply could push glycerine values up by $110-220/tonne (€87-174/tonne). One major producer disagreed, saying demand was so lacklustre that suppliers may not be able to convince buyers to agree to more than a couple of cents per pound.
Global chemical market intelligence service ICIS pricing assessed prices for tallow and vegetable-derived glycerine at $728-948/tonne on 18 February.
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