Europe Q2 glycerine contracts up €30-75/tonne on tighter supply

18 April 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European second-quarter glycerine contract prices have increased by €30-75/tonne ($39-99/tonne) from the previous quarter because supply has tightened, according to market sources on Wednesday.

European vegetable glycerine contract values increased by €75/tonne to €600-650/tonne FD (free delivered) NWE (northwest Europe), while tallow glycerine prices were assessed up by €30/tonne, to €540-590/tonne FD NWE.

Both producers and buyers confirmed increases, attributing higher numbers to tight supply caused by lower levels of biodiesel production.

Crude glycerine is a by-product of biodiesel production and is refined into vegetable and tallow glycerine.

Buying interest in biodiesel is at low levels in Europe as a difficult economic climate has meant there is lower demand for transport fuel in general, meaning oil companies are blending less biodiesel.

In addition, used cooking oil methyl ester (UCOME) has become popular with buyers because it counts double towards targets for cutting greenhouse gas (GHG) emissions, because it is produced from a waste product.

This means blenders can purchase half the amount of biodiesel to reach their targets and has resulted in decreased demand and production for other biodiesel grades.

($1 = €0.76)

By: Sarah Trinder
+44 20 8652 3214

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