Europe glycerine market unsurprised by EU biodiesel duties

30 May 2013 00:01  [Source: ICIS news]

LONDON (ICIS)--The European Commission’s announcement on May 28 of the duties imposed on imports of biodiesel from Argentina and Indonesia, was no surprise to the glycerine market, sources said on Wednesday.

A producer said it does not see any effects from the duties yet and not much will change in the coming months, but in the long run the better grades will get tight.

The biodiesel levies, due to take effect on Wednesday, 29 May, are unlikely to have much impact on the co-product of glycerine, with the concurrent issue of the Commission’s proposal to cap crop-based biofuels to 5% of renewable fuel targets likely to cause the most problems for the glycerine industry.

Despite the belief that the anti-dumping duties (ADDs) would help revive the European biodiesel industry, the proposed cap would limit the amount of rapeseed methyl ester (RME) produced, and therefore limit the amount of high quality crude glycerine available.

Sources remain uncertain about the long term availability of kosher non-genetically modified organism (GMO) material, as some comfortable sufficient volumes will still be produced under the 5% cap, while other sources said a greater reliance on product from the oleochemical sector will be likely.

In the spot market, and despite most participants being unmoved by the introduction of biodiesel levies, prices for refined vegetable glycerine firmed this week for the first time in nearly eight months on the back of stronger buying interest.

Sources said the difficulty of predicting the direction of prices this year and low spot prices saw a reasonable amount of activity on the spot market.

The increases were also caused by a double-edged sword effect of lower diesel demand in Europe and summer specifications for biodiesel which favour waste product over RME has seen some tightening in supplies of high quality crude glycerine.

Market participants were mostly in agreement that prices were rising on the back of greater demand – notably from the feed sector. A trader said that there was also some interest from Eastern Europe in the third quarter for anti-freeze applications.

($1 = €0.78)

By: Kate Wilcock
+44 208 652 3214

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