Q2 refined glycerine contracts rise on tightening supply

10 April 2013 23:29  [Source: ICIS news]

Q2 refined glycerine contracts rise on tightening supplyMEDELLIN, Colombia (ICIS)--Q2 US refined vegetable contract spreads were assessed higher, while tallow glycerine contract ranges were assessed wider amid tightening supply.

Q2 tallow contract ranges, fully certified as USP by US agencies, were assessed wider at 42-50.50 cents/lb ($926-1,113/tonne, €704-846/tonne)  (free on board) FOB Midwest for small to medium volumes.

Prices were pooling in the low 40s cents/lb FOB Midwest at the low end of the range.

The wider range reflects the upward movement in the market, as many sellers were able to push through Q2 increases of 2-3 cents/lb and some even higher at an increase of 5 cents/lb for the quarter.
Multiple sellers said the presence of product out of non-certified plants is pulling down on the low end of the tallow range.

Vegetable refined glycerine, on the same certification basis, is assessed in the second quarter at 46.00-51.00 cents/lb, same basis location and volume.

Multiple sellers are said to be sold out on bulk product, with at least one on order control and not taking any new business for the second quarter. However, there is a limited amount of drummed product available.

Pharmaceutical-grade refined glycerine was assessed at 70.00-77.00 cents/lb FOB Midwest amid strengthening fundamentals.

The snugness in the overall market is being attributed to numerous factors.

Asia is said to have cut back on amounts of product shipped, as biodiesel production out of Indonesia has dropped following the anti-dumping investigation in the EU, according to sellers and a trader. Reduced biodiesel production has limited the amount of crude glycerine available for refining.

Also, China is said to be drawing on glycerine supply to run its epichlorohydrin (ECH) production. Operating rates at ECH plants in China are said to be at 50% capacity, but players in the glycerine market said the Chinese were running at higher rates than last year. ECH contract sales for some sellers are at better prices than China in other Asian markets such as Japan, South Korea and India.

Meanwhile, domestic demand for refined glycerine in the US for use in the seasonal agriculture sector has been described as very busy.

The US refined market could see a drop in pricing at the end of May and into June, as the agriculture-use buyers leave the market and vessels on the water are expected to arrive, according to a trader.

Refined glycerine suppliers no longer announce price changes, preferring to negotiate on an account-by-account basis.

US refined glycerine suppliers include Procter & Gamble, Vantage Oleochemical, Emery Oleochemical, Twin Rivers Technology and Peter Cremer North America.

Major importers include Wilmar, Acme-Hardesty and several trading groups.

($1 = €0.76)


By: Leela Landress
+1 713 525 2653



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