US glycerine contracts expected to roll over in fourth quarter

21 September 2011 21:22  [Source: ICIS news]

HOUSTON (ICIS)--US refined glycerine contracts are expected to roll over from the third to the fourth quarter, market sources said on Wednesday.

“We are just into fourth-quarter negotiations, but prices are firm,” one supplier said.

Refined vegetable-based glycerine contracts were last assessed by ICIS at 38-46 cents/lb ($838-1,014/tonne, €612-704/tonne) FOB (free on board) midwest, with tallow-based contracts at 36-44 cents/lb FOB midwest.  

Monthly contracts at these levels recently were assessed at a rollover between August and September, setting the initial price sentiment for the quarterly assessments to move at a rollover.

“Recreational vehicle (RV) and anti-freeze (AF) de-icing sales are very good,” a seller confirmed.

In late July and early August, many sources expected the fourth-quarter to reflect downward price pressure of about 1-2 cents/lb on the high end of the assessments because of slower demand in several end-use segments.

The downward pressure did not materialise because of the gains in the RV and AF end-use segments. In these end-uses, using additional glycerine in formula components can be a cost-saving mechanism because of rising prices in a number of petrochemicals, including propylene glycol (PG).

Refined glycerine competes directly with USP food-grade, AF grade and industrial-grade PG.

Industrial-grade PG was last assessed by ICIS at $1.08-1.13/lb on FOB East of the Rockies basis, AF grade PG at $1.02-1.10/lb and USP food-grade at $1.13-1.18/lb.

By: Judith Taylor
+1 713 525 2653

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