11 July 2013 16:30 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--US Q3 refined vegetable and tallow contract spreads narrowed on Thursday as sellers were able to push through increases for contracts at the low end of the ranges as import pricing has moved up slightly and US demand remains at a steady clip.
Third quarter tallow contract ranges, fully certified as USP by US agencies, were assessed narrower at 44.50-50.50 cents/lb ($981-1,113/tonne, €765-868/tonne) FOB (free on board) Midwest for small to medium volumes.
Vegetable refined glycerine, on the same certification basis, was also assessed narrower, increasing by 2 cents/lb on the low end of the range to 48.00-51.00 cents/lb.
There was talk that a major producer was planning to raise vegetable refined glycerine for the third quarter by 8 cents/lb, but market players said there was push back from buyers and the increase was unconfirmed.
Prices were assessed up on the low end of the published range for pharmaceutical-grade refined glycerine on an FOB basis, as it was said to be solidly priced in the 70s cents/lb range for the quarter.
The upper ends of the ranges were unchanged, as they were still representative of the market, buyers and sellers said.
The snugness in the overall market is being attributed to numerous factors.
Imports of vegetable refined glycerine out of Malaysia and Indonesia are said to be tight, as numerous oleochemical producers are in maintenance or planning to start maintenance in the near future.
In southeast Asia, vegetable refined glycerine prices rose amid restocking and tight supply. There are signs of a demand slowdown in the industrial application sectors such as epichlorohydrin (ECH), with a key ECH producer heard to have cut down on its refined glycerine consumption.
Demand in downstream applications in the US is said to be steady and at healthy levels, buyers and sellers said.
There was talk that one oleochemical producer had a production issue, but other sellers said production across the board is at good levels.
There were a few larger quantity buyers falling slightly below and smaller buyers who were a little above published ranges, but the bulk of the market is reported to be at the published levels.
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 = €0.78)
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