23 April 2012 00:00 [Source: ICB]
Correction: In the ICIS Chemical Business article headlined "Oleochemicals: US refined glycerin Q2 price rises amid emerging technical grade market tier," please read in the 12th paragraph … Groups said to be bringing in the tech-grade material include Gavilon and Ocean Connect … instead of … Wilmar, Gavilon and Ocean Connect …. A corrected story follows.
Refined glycerin second-quarter contracts in the US settled higher amid clashing prices with South American imports, which are redefining market tiers, according to buyers and sellers.
As of April 12, ICIS assessed vegetable-based refined glycerin second-quarter contracts at 41.50-49.00 cents/lb ($915-1,080/tonne, €695-821/tonne), while tallow-derived glycerin contracts were assessed at 39-48 cents/lb, both on a free on board (FOB) midwest basis.
Assessments represented an increase of about 1 cent/lb for vegetable material and 2 cents/lb for tallow from first-quarter levels.
Price disparities are opening between these two traditional refined glycerin tiers as South American refined glycerin from biodiesel production is making market share incursions in the US, domestic buyers and sellers said.
The price disparities happen at the low end of the tallow range, despite the vegetable basis of the South American material.
This is because glycerin made and refined from biodiesel production cannot be certified as US Pharmaceutical (USP), and most of the US vegetable- and tallow-based refined glycerin is USP certified.
As a result, a previously seldom used term called technical grade (tech-grade) glycerin, which refers to USP quality material that is not fully certified, is clashing with the traditional tiers, mostly affecting the low end of the tallow market.
"Prices are all over the place because of the tech-grade stuff," one glycerin buyer said.
Tallow glycerin is oleochemically produced as a co-product of fatty acid production or by the saponification procedures in soap-making. Prior to biodiesel production, the two-tiered glycerin market reigned.
But with long-term contracts taking place at prices well below USP certified contract prices, the tech-grade tier is here to stay.
Tech-grade glycerin contracts were largely discussed at 33-37 cents/lb, mostly on a FOB US Gulf basis, but no market range is yet established for this glycerin.
US refined glycerin producers of USP-certified material include Procter & Gamble Chemicals, Vantage Oleochemical, VVF, Twin Rivers Technology and Cargill. Groups said to be bringing in the tech-grade material include Gavilon and Ocean Connect.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
Sample issue >>
My Account/Renew >>
Register for online access >>
|ICIS Top 100 Chemical Companies|
|Download the listing here >>|
Asian Chemical Connections