US glycerine contracts poised to jump 5-10 cents in Q2

11 March 2009 16:10  [Source: ICIS news]

HOUSTON (ICIS news)--Spurred by a shrinking supply of raw material, refined glycerine suppliers in the US are positioning themselves to hike contract prices by 5-10 cents/lb ($110-220/tonne, €87-174/tonne) for the second quarter, sources said on Wednesday.

The increase would bring contract prices as high as 45-55 cents/lb. That would be the first increase since contract prices started sliding from average highs of 100 cents/lb for vegetable-based glycerine and 80 cents/lb for tallow-based material in the third quarter of 2007.

A steep cutback in biodiesel production has shrunk the pool of crude glycerine, the renewable fuel’s co-product. That led refined glycerine suppliers to propose price hikes for customers nervous about access to supply.

“Customers will fight any increase, but I think they’ll have no choice. No one will lose business,” a distributor said of the proposed increase.

Suppliers and buyers were still debating whether contract prices for vegetable-based and tallow-based material would diverge after coming together in first-quarter 2009.

Major US suppliers include Archer Daniels Midland (ADM), Cargill, Dial, Proctor & Gamble and Uniqema.

($1 = €0.79)

Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels
For more information on glycerine, visit ICIS chemical intelligence
To discuss issues facing the chemical industry, go to ICIS connect

By: Ben Lefebvre
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly