LONDON (ICIS)--First-quarter contract negotiations have now concluded in the European fatty acids market, with all grades increasing from fourth-quarter levels, sources said on Wednesday.
Palm stearic acid settled at €900-980/tonne FD (free delivered) NWE (northwest Europe), an increase of €50/tonne on the low side, and €30/tonne on the high side.
Palm oleic acid increased by €20/tonne on the low side and €30/tonne on the high side, settling at €1,120-1,230/tonne FD NWE.
Although palm feedstock values have declined throughout the past month, they have remained at high levels since Typhoon Haiyan hit the Philippines in early November 2013.
This, together with the implementation of import duties on palm-based fatty acids from India, Indonesia and Malaysia, has resulted in firmer prices this quarter, sources noted.
By contrast, both tallow fatty acid grades increased only on the low end for the first quarter.
Tallow oleic acid was concluded at €1,130-1,200/tonne FD NWE, an increase of €30/tonne on the low end.
While tallow stearic acid settled at €940-1,000/tonne FD NWE, €40/tonne higher on the low end.
A few deals took place outside of the above ranges, however these were outside of the widely agreed consensus.
Although raw tallow feedstock costs have also increased, one supplier of tallow-based acids said it was “too difficult” to pass these costs onto its customers.
He added that he preferred to limit increases in order to remain competitive in the market.
Sources noted more tallow feedstock material was now being made available to oleochemical producers, and this may lead to prices coming under pressure during the quarter as a result.
Supply and demand of fatty acids remains in balance, however sources for now remain unsure over the full impacts of the Asian import duties on European pricing.