China crude glycerine prices to rise on demand pressures

05 September 2011 08:47  [Source: ICIS news]

SINGAPORE (ICIS)--China’s crude glycerine prices are likely to rise further in the coming weeks fuelled by demand pressures, market players said on Monday.

“[The domestic] crude glycerine prices are rising and likely to hit the $400/tonne (€280/tonne) CIF (cost, insurance & freight) CMP (China Main Port) level by the end of September,” a Chinese trader said.

“Material availability is scarce and increased demand is fuelling price hikes,” a Chinese buyer added.

The supply of crude glycerine in China is tight because of lower biodiesel production in southeast Asia, which in turn was caused by poor buying interest, traders said.

Crude glycerine is a by-product of biodiesel production, the traders added.

Another reason for the surge in demand for crude glycerine is new applications of the material, such as epicholrohydrin (ECH), in China, the traders added.

“[The production of] ECH in China will continue to consume large amounts of crude glycerine apart from the regular downstream applications,” the Chinese buyer said.

In addition, good quality crude glycerine from South America is increasingly scarce as most cargoes of the product have already been booked for the end of the year and are bound for Europe, a key trader said. 

The prices of crude glycerine were assessed at $330-350/tonne CIF CMP on 5 September, which is up by $10/tonne from the same period last week.

($1 = €0.70)

By: Serena Seng

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