Europe Q2 fatty acids negotiations near conclusion

26 March 2014 23:59  [Source: ICIS news]

LONDON (ICIS)--Second quarter negotiations are nearing conclusion in the European fatty acids market, with only a few outstanding discussions remaining, sources said on Wednesday.

Buyers that had previously delayed negotiations owing to declining palm feedstock costs are now thought to be pushing ahead with discussions.

Participants believe it is not very likely that the lower feedstock values will impact palm-based fatty acid prices during Q2, and for this reason buyers see no reason to delay negotiations any longer.

A producer said that it had settled the majority of its Q2 tallow stearic acids contracts at €950/tonne FD (free delivered) NWE (northwest Europe), and palm stearic acids contracts at €1,000/tonne FD NWE.

The producer added that with tallow-based fatty acids now emerging as the more competitively priced grade, it was seeing more buyers switching from palm-based fatty acids to this option.

“Those buyers that have the flexibility are now looking at tallow,” it said.

Another producer said its tallow stearic acid prices were at €950-980/tonne FD NWE, while tallow oleic acid prices have experienced an increase since Q1, trading at €1,200-1,250/tonne FD NWE owing to a shortage in supplies.

Tallow oleic acid prices were also being heard at this level, a buyer said.

It added it would not consider making any palm oleic acid purchases at present, as the tallow grade was “significantly cheaper.”

By: Neha Popat
+44 208 652 3214

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