Europe glycerine Q4 contract prices plummet on strengthening supply

Source: ICIS News

2018/10/11

LONDON (ICIS)--European glycerine fourth-quarter contracts have settled at a decrease from Q3 values, following a down trend in the market over the last few months.

This dip in prices was mainly due to increased supply from the middle of the third quarter onward, with the refined vegetable glycerine market bordering on oversupply in August-September.

Refined vegetable glycerine prices slumped €150/tonne to €700-800/tonne FD (free delivered) NWE (northwest Europe).

Refined tallow glycerine prices followed this downwards trend despite generally stable market fundamentals for most of the year. The market is heavily influenced by the technical vegetable market, with which it competes.

Refined tallow glycerine values dipped €120/tonne on the low end and €130/tonne on the high end to €600-680/tonne FD NWE.

Spot values for refined vegetable glycerine are stable this week. Values below the range were heard but prices are assessed steady pending confirmation of lower levels.

There is talk that some lower prices might be as a result of players trying to clear stock for the end of the year.

The crude glycerine range is also unchanged pending further market feedback on possible downwards pressure noted this week.

Healthy supply is being noted across the glycerine market in mid-October, though low water levels on the river Rhine are still causing heavy logistical issues for plants based inland in Germany.

These issues are being offset by the abundance of material that was being held in storage.

Demand for refined vegetable glycerine is strong at the beginning of Q4, though a typical dip is expected heading towards December.

An increase in annual contracts this year has meant slightly less buying interest on a spot basis, though some players are returning to the market in the fourth quarter to fill shorts from those annual contracts.

Chinese demand has been waning over the last few weeks due to public holidays in the country, and decreasing prices in the region are making shipments from Europe less attractive.

Significant buying interest is still being noted from the feed industry for crude glycerine, attributed mainly to the downtrend on prices in recent months.