Europe glycerine supply tightens on lower biodiesel production

09 March 2011 18:40  [Source: ICIS news]

LONDON (ICIS)--European supplies of glycerine have tightened because producers are making less biodiesel, sources said on Wednesday.

Glycerine, a by-product of biodiesel production, was becoming tighter week on week and putting pressure on spot prices.

Prices for vegetable glycerine had increased significantly in recent weeks. Spot prices were assessed up by a further €10/tonne this week, reaching €580-610/tonne ($806-847/tonne) FD (free delivered) NWE (northwest Europe).

Biodiesel production has been running at low levels because of high prices for feedstock vegetable oil.

As biodiesel needs to remain competitive with gasoline, producers are unable to increase prices in line with vegetable oil costs.

Rapeseed methyl ester (RME), the most commonly produced biodiesel grade in Europe, was trading at $1,470-1,507/tonne FOB (free on board) NWE.

One source said that in five years it may be the case that glycerine consumers will be forced to use alternative products as it did not supplies to ease.

The source said that the high vegetable oil prices would eventually mean that biodiesel producers would have to use different feedstocks such as algae and used cooking oil which, would not produce usable glycerine.

($1 = €0.72)

By: Sarah Trinder
+44 20 8652 3214

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