11 July 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European third-quarter glycerine contract prices have increased from the previous quarter because of tight supply, market sources said on Wednesday.
European vegetable glycerine contract values increased by €20/tonne ($24/tonne) on the low end of the range to €620–650/tonne FD (free delivered) NWE (northwest Europe), while tallow glycerine prices were assessed up by €20/tonne, to €560–610/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 byproduct of biodiesel production and is refined into vegetable and tallow glycerine.
European biodiesel production has decreased because of competition from competitively priced imports and the popularity of used cooking oil methyl ester (UCOME).
Cheaply priced biodiesel imports such as soybean methyl ester (SME) from Argentina and palm methyl ester (PME) from Malaysia and Indonesia have resulted in lower levels of demand for rapeseed methyl ester (RME).
European producers have been unable to compete and have reduced production rates as a result.
In addition, UCOME counts double towards targets for cutting greenhouse gas (GHG) emissions, because it is produced from a waste product.
This allows blenders to purchase 50% less biodiesel while still reaching GHG emissions saving targets, and as a result there is less demand for other biodiesel grades.
($1 = €0.82)
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