Rising raw tallow feedstock costs may boost fatty acids prices

15 May 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--Firming raw tallow feedstock costs may lead to an increase in tallow-based fatty acids in Europe, producers said on Wednesday.

Spot trades of tallow-based material currently remain within the second-quarter contract range, with participants this week seeing trades of tallow stearic acid at €900-950/tonne FD (free delivered) NWE (northwest Europe), and tallow oleic acid around €1,100/tonne FD NWE.

However, producers report they are now receiving higher offers for raw tallow feedstock, owing to increased interest from the biodiesel industry.

Although this has yet to have a significant impact on prices of fatty acids, one producer believes this could change in the lead up to third-quarter negotiations.

“If costs [of raw tallow] continue to increase, then I will have no choice but to increase the price at which I offer tallow fatty acids,” one producer said.

Another producer said it was now receiving offers for raw tallow feedstock at €670/tonne, and that it “may consider” passing on additional costs to its fatty acids buyers if feedstock costs continued to increase.

For now the balanced conditions continue to lead to stable pricing in the European market, participants do not anticipate any significant change to pricing until third-quarter negotiations pick up towards the end of the month.

 

($1 = €0.77)


By: Neha Popat
+44 208 652 3214



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