06 September 2013 10:02 [Source: ICB]
Glycerine prices have been rising since the start of the year because of tight supply in Asia amid plant turnarounds
Asia's refined glycerine prices are expected to stabilise in the fourth quarter amid tight supply, higher feedstock prices and a possible seasonal pickup in demand, market sources said on 29 August.
Refined glycerine prices were at an average of $965/tonne (€733/tonne) FOB (free on board) SE (southeast) Asia as of 28 August 2013, up by 20% year on year, according to ICIS data.
Discussion for spot cargoes for the week ended 28 August were largely for October shipments while a few producers were offering November loading cargoes amid lower inventory levels.
"Supply is tight for sport cargoes and we are hearing more November offers now," said a trader.
Glycerine prices have been rising since the start of this year because supply has been tight in Asia amid a series of fatty alcohol and fatty acid plant turnarounds.
This includes a turnaround at a major southeast Asian producer's 100 tonne/year refined glycerine unit in end-June as well as a 120,000 tonne/year turnaround at a plant belonging to a major fatty alcohol producer in Indonesia.
The unit in Indonesia has yet to resume full operations since being shut in May this year for maintenance, according to market sources.
Meanwhile, the slowdown in the Indonesian biodiesel industry, which has been slapped with provisional antidumping duties (ADDs) for its palm methyl ester (PME) exports to Europe, has affected market supply.
Forward bookings by European traders since June 2013 also contributed to the tight inventory in southeast Asia.
The snug situation in Europe is caused by limited availability of crude glycerine for refining. "Glycerine prices are likely to be stable-to-firm in the fourth quarter because demand will pick up for downstream applications such as anti-freeze and moisturizer in personal care, when the weather turns cold," said one producer.
Several players added that refined glycerine prices are likely to be stable-to-firm, in view of the firmer upstream palm oil sector in the coming weeks.
Prices for palm kernel oil (PKO) for September delivery were at $868.94/tonne DEL in south Malaysia on 28 August, up by $39.70/tonne from the week ended 21 August.
"The higher crude glycerine prices in [the] Chinese market might drive up refined glycerine prices Already the 95% refined glycerine prices in the domestic Chinese market were higher this week," said a buyer. The shortage of crude glycerine in China was attributed to lesser exports from key suppliers in South America.
Some buyers, meanwhile, said that refined glycerine prices may come under pressure on the back of increased biodiesel production in South America.
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