OUTLOOK ’13: Prospects up for refined glycerine, oleic fatty acids

04 January 2013 16:46  [Source: ICIS news]

HOUSTON (ICIS)--Prospects are good for refined glycerine and for oleic fatty acids in the coming year.

Market players in each of these related oleochemical segments are expecting prices and demand to be bolstered by oilfield applications and exciting potential for new end-uses in 2013. 

One oleochemical company is taking early steps to ensure its supply position in glycerine and in fatty acids.

Vantage Specialty Chemicals has announced plans to expand its oleochemical production capacity for refined glycerine and oleic fatty acids at its 34 acre (14ha) facility located at Chicago, Illinois, company representatives recently confirmed.

“The oleic acid is needed to support rapidly expanding growth in new markets. We also see organic growth in the consumer markets to warrant this expansion,” Guillermo Schnitzler, Product Manager – Fatty Acids, said.

The refined glycerine expansion will add a kosher vegetable glycerine unit into the facility, adding to the tallow USP glycerine production now done at the Food and Drug Administration-registered facility, Deborah Baldwin, Glycerine Product Manager, said.

While the kosher glycerine addition, expected to come on line in the second quarter, represents a new line of production, Vantage is fully supportive of its active position in the US tallow refined glycerine market.

“We view the tallow oleochemical industry in the Americas as a viable and sustainable long-term business,” both sources added.

The company did not release specifics on the amount of additional glycerine production capacity to be added to the Chicago facility, but confirmed a $25m (€19m) investment is approved for the two expansions, with initial construction having begun in October.

The oleic fatty acid expansion will add 30m lbs/year of additional fatty acid production capacity to the plant, with full streams available by year-end 2013. The company did not disclose present capacity production levels on its total tallow-based oleic acid.

Demand for oleic fatty acid in 2012 rose significantly because of the need for C18 liquid (at room temperature) products for oilfield applications, particularly processes used for “fracking” in the new production fields opened by the US natural gas boom.

Vitalised demand for C18:1 oleic fatty acids moving into the oilfield generated tight supply in the fatty acid for most of 2012, driving prices for tallow-based C18:1 up from  69-72 cents/lb in January 2012 to 80-83 cents/lb in December.

The rise in C18 acid demand grabbed a smaller, non-oleochemical, source along with it, as tall oil fatty acids (TOFAs) can also provide the physical and chemical characteristics of the oleo product.

Produced from crude tall oil generated from paper pulping process, TOFA demand gained pace alongside the oleochemical fatty acid, with its prices rising about 13 cents/lb over the year.

These fatty acid prices are said to have mostly ramped up to maximums, but the demand for C18s is expected to keep supply tight throughout 2013.

Glycerine is a 10:1 co-product of fatty acid production in the oleochemical, fat/oil-splitting process.

So along with more production of fatty acids, more glycerine is made and typically refined.

Refined glycerine was oversupplied in 2011, moving into balance across 2012. But in 2013 prospects for a new end-use in engine coolants are gaining attention and offering demand growth estimated by industry participants to be as much as 10m lbs of new consumption by the end of 2013.

A set of specification standards for a glycerine grade to be used in engine coolants has been ratified by the ASTM International (formerly known as the American Society for Testing and Materials), market sources confirmed in the third quarter of 2012. 

The first specification for ASTM Engine Coolant Grade Glycerine (D7640) was approved and released for industry-wide publication in August, ASTM sources said.

Several ASTM engine coolant glycerine specification sets continue to be in various stages of development, with expectations that light and heavy duty vehicle coolant systems using glycerine will enter commercialisation phases late 2012/early 2013. 

Refined glycerine of 99.5% purity will be one of the blendstocks for several of the coolant systems, sources said.

ASTM approved specifications are widely sought for new products coming into the US automotive industry because the approval process includes a series of rigorous testing parameters, often taking several years to complete.

So prospects are good in 2013 for these oleochemical products, as US industry participants set sights on new horizons for the time-honoured roles of glycerine and fatty acids.

By: Judith Taylor
+1 713 525 2653

AddThis Social Bookmark Button

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.

Printer Friendly