26 March 2012 00:00 [Source: ICB]
Glycerin is used primarily in skincare products and food and beverages. Other outlets include personal care products, tobacco humectants, polyether polyols for urethanes, drug and pharmaceutical applications, explosives, alkyd resins and miscellaneous uses in plasticizers, lubricants and cellophanes.
One new application for glycerin is its use in recreational vehicle (RV) fluids, which emerged in 2011. This application is expected to grow to an approximate 3-4% of end-use share from 2012-2014. An estimated 20m lb of glycerin went into the RV fluid market segment in 2011.
Supply was assessed at 510m lb in 2011 and in January-March 2012, an amount that is expected to increase. This is up from the 465m lb on the US market in 2007. Glycerin demand growth was at 2.3%/year in 2002-2007. Growth through to 2011 was estimated at 2.2%/year.
In the bio-based arena, US-headquartered firm Archer Daniels Midland (ADM) constructed a 100,000 tonne/year refined glycerin-to-propylene glycol (PG) plant in Decatur, Illinois, ushering in commercial volume production of bio-based glycols. ADM entered the glycerin market in 2008-2009 through its biodiesel production, with subsequent refining of its co-product, crude glycerin. The refined glycerin market opened 2011 with improving supply and demand fundamentals, following a recovery from sporadic - but sustained - long supply conditions in 2008-2010. An economic recovery in the US, along with emerging new applications, led to a balanced market in 2011, with firming demand poised to tighten supply in 2012.
US-based Dow Chemical ceased production of synthetic glycerin effective January 1, 2006, and maintains only small volume production of synthetic glycerin in Germany.
Twin Rivers Technologies sold its Painesville, Ohio facility in 2007. The site no longer produces glycerin. Ferro's 10m lb/year facility in Fort Worth, Texas is understood to have captive production only.
Refined glycerin contract spreads were assessed at a rollover in March from February, with healthy demand and emerging applications keeping price sentiment firm at mid-quarter in the first quarter of 2012. Second quarter contract negotiations are underway, with firm-to-rising price expectations mentioned in the week ending March 14, as assessed by ICIS.
As of this year's first quarter, glycerin tallow-grade contract prices were at 37-46 cents/lb ($816-1,014/tonne) FOB (free on board) Midwest, while vegetable-grade contracts were at 41-48 cents/lb FOB Midwest. Pharmaceutical-grade glycerin contract prices were at 57-67 cents/lb FOB Midwest, as assessed by ICIS.
Crude glycerin is typically produced in oleochemical fatty acid production, wherein fats and/or vegetable oil molecules are split, forming the fatty acid - tallow from fats; vegetable from vegetable oils - and a glycerin co-product at a 10:1 ratio.
Crude glycerin is also obtained from soap-making by saponification, producing a soap-lye crude. Biodiesel production via transesterification makes a fatty acid methyl ester (FAME) using fats and oils as raw materials, producing a 10:1 ratio of FAME to co-product bio-crude.
Forecast growth through 2012 is 2.2%, driven mainly by personal care and food products. New applications, such as ADM PG production, could boost the growth level in 2012-2013, if additional production enters the US market. The PG plant start-up moved ADM from a refined glycerin seller to a net buyer in 2011.
With increasing interest in new applications for refined glycerin, the outlook is for increasing demand to tilt 2011's balanced fundamentals towards tightening supply in 2012.
While some bio-crude glycerin can be used by refiners, not nearly all of it is acceptable product. Soap-lye crude from saponification processes used by soap-makers can add to the hydrolyzer crude (splitter-crude) supply from fatty acid production, but the US need for imported refined glycerin will continue.
US-based agribusiness Cargill entered the refined glycerin market in 2006-2009 by building refineries at its Iowa Falls, Iowa and Kansas City, Missouri, biodiesel plants. These were built to refine the biodiesel co-product crude glycerine to USP specifications.
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