19 December 2012 19:26 [Source: ICIS news]
Sources are yet to agree on the price direction for first-quarter 2013 contracts, with European biodiesel production levels the big unknown.
“We don’t know how much of the mandate has been used or over blended in 2012 and therefore we don’t know how much blending will take place in 2013,” the distributor said.
Participants on the sell side said glycerine demand has gone up and will put pressure on supply. As a result, price increases are likely.
Those on the buy side expect biodiesel production will rise in January and prices will ease.
A buyer said there was optimism that there would be more biodiesel production than in the fourth quarter. However there is concern over the short-term nature of the current biodiesel contracts.
“We’ll see more biodiesel become available, but January production levels are more certain than February,” the buyer said.
“There should be more biodiesel produced in 2013 which will have an effect on the world market, and from that we will see prices come down from historically high levels.”
A producer said demand was strong for the first quarter. However it will likely ease for tallow grades, as less buying occurs for anti-freeze applications.
“It will be interesting to see how prices develop,” the producer said.
Values for all spot glycerine grades remained stable this week. However, regional variations in price were reported for high quality crude glycerine.
A source in the German market said with the popularity of double counting waste biodiesel such as used cooking oil methyl ester (UCOME), the supply of kosher non-genetically modified organism (GMO) crude glycerine is limited.
However sources said supply was better elsewhere in northwest Europe, including the Netherlands and France.
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