17 October 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European fourth-quarter glycerine contracts have increased by €120-180/tonne ($156-234/tonne) on tight supply, sources said on Wednesday.
Fourth-quarter refined vegetable glycerine contracts settled at €770-830/tonne FD (free delivered) NWE (northwest Europe), up €150-180/tonne from the third quarter.
Tallow glycerine fourth-quarter contracts settled at €680-730/tonne FD NWE, up €120/tonne from the previous quarter.
Values have increased because of prolonged tight market conditions which are a result of low biodiesel operating rates in Europe.
Crude glycerine is a by-product of biodiesel production and is refined into vegetable and tallow glycerine.
First-generation biodiesel producers have been forced to reduce operation rates because of poor market economics caused by competition from cheap imports and the popularity of used cooking methyl ester (UCOME).
UCOME has experienced high levels of demand as it counts double towards EU targets for cutting greenhouse gas emissions because it is produced from a waste residue.
UCOME has experienced high levels of demand as it counts double towards EU targets for cutting greenhouse gas emissions because it is produced from a waste residue."It's definitely extremely tight out there and nobody is ringing me up to offer product," one buyer said.
"We're casting the net wider for more suppliers to limit our exposure in the event that tight conditions like this occur again," another buyer said.
($1 = €0.77)
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