SINGAPORE (ICIS)--Asia refined glycerine export prices are under downward pressure because of ample supply and weak demand, sources said late on Wednesday.
Spot cargoes for July shipments fell $10-20/tonne from the previous week, at an average of $830/tonne FOB (freight on board) SE (southeast) Asia in the week ended 11 June, according to ICIS pricing.
“Market is softening with more supplies in the market,” a southeast Asian producer said.
Supply is ample because of higher biodiesel production levels during the seasonal peak period and higher biodiesel blending requirements regulated by the governments in the region.
However, several market players said they expect lower production level from regional fatty acids facilities to cap the bearish sentiments and keep market prices from tumbling drastically.
Demand from traditional applications such as personal care, cosmetic and food related sectors is stable but those from industrial applications such as alkyd resin and epichlorohydrin (ECH) is slower-than expected.
One industrial buyer said deep-sea cargoes from Europe and Latin American region were more attractively priced, around $700/tonne CIF (cost, insurance, freight) Asia in flexi bag, while prices from southeast Asian producer were simply not workable for their production cost.
This might pressurize regional glycerine prices further, according to the source.
Nevertheless, some southeast Asian producers felt it is unlikely that many buyers to switch to deep-sea cargoes because of the uncertainties during the long shipping time and various logistic issues.