AFPM ’14: US tallow-based fatty acids market dynamics steady

29 March 2014 20:00 Source:ICIS News

MEDELLIN, Colombia (ICIS)--Conditions in the US tallow-based fatty acids market are steady heading into this year's International Petrochemical Conference (IPC) as supply and demand is unchanged from recent months, sources said.

"The market has been really steady, but fluid," a large buyer said.

The tallow-based fatty acids supply/demand dynamics have been unchanged from previous months with US C18 stearic triple pressed, C18 stearic rubber grade supply balanced, but trending slightly long and C18:1 oleic acid supply finely balanced, buyers and sellers have said.

As much of the market participates in formula pricing using bleachable fancy tallow (BFT) averages for the previous month, BFT averages for March, so far, have seen an increase and will likely push tallow-based fatty acids ranges for April higher.

The spot tallow market surged over recent weeks, as supply remains limited and demand healthy, tallow traders said.

Buyers are looking for BFT with bids around 41.50-42.50 cents/lb ($915-937/tonne), but lack of supply likely due to lower slaughter volumes could push tallow pricing higher in coming weeks, the trader said.

Cattle slaughter in February this year reached 2.24m head, down by 5% from February 2013, the US Department of Agriculture (USDA) said in its most recent monthly livestock slaughter report by the National Agricultural Statistics Service (NASS).

The average live weight was up 10 lb (4 kg) from the previous year, at 1,330 lb, USDA said.

The average live weight is the weight of the whole animal before slaughter.

Beef production, at 1.79bn lb, was also lower by 5% from February 2013, USDA said.

By Leela Landress