US fats/grease prices steady on absent biodiesel

28 July 2010 21:39  [Source: ICIS news]

HOUSTON (ICIS)--US fats and grease prices remain steady going into August due to the absence of biodiesel purchases, tallow-based fatty acid producers said on Wednesday.

Prices for bleachable fancy tallow (BFT), the feedstock for tallow derived fatty acids, circulated around 32 cents/lb ($705/tonne, €543/tonne) in Chicago, unchanged from last week’s level, grease traders said.

US tallow fatty acid producers said BFT prices in the 30s cents/lb were about 5-6 cents/lb more than at this time last year when they were at 28-29 cents/lb amid decreasing biodiesel production.

The higher BFT prices in the current market were attributed to grease sellers and traders trying to hold prices up in hopes of recovery in US biodiesel production, which was now absent due to stalled tax credit legislation.

Traders said South American supply of tallow and other greases available for US import was tighter as a result of the fuel difficulties in Argentina, forming a support factor for US tallow prices in the low 30s cents/lb.

The US domestic fats and grease market typically maintains a narrow balance, with at least 90% of the products going into food uses, according to grease traders.

When biodiesel producers enter the market, fundamentals tilt toward demand, domestic supply tightens and prices go up, fatty acid suppliers said.

Tallow-based fatty acid producers incorporate a monthly average of BFT prices into contract formulas.

Triple-pressed stearic acids derived from tallow were last assessed at 52-55 cents/lb by ICIS. Tallow-based oleic acids were assessed at 62-65 cents/lb.

Tallow fatty acid producers include Procter & Gamble, Vantage Oleochemical and Emery Oleo. 

($1= €0.77)

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By: Judith Taylor
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