US Q1 refined glycerine contracts widen amid fight for market share

16 January 2014 20:01 Source:ICIS News

MEDELLIN, Colombia (ICIS)--The bulk of US Q1 glycerine contracts were assessed at rollovers on Thursday, but prices widened amid a fight for market share.

Vegetable-grade USP-certified refined glycerine saw the biggest fight for market share, according to buyers and sellers.

For USP-certified vegetable-grade product, trading ranges were assessed down on the low end of the range to reflect pricing levels heard contracted during the quarter amid the fight for market share.

The upper end of the range was assessed higher as kosher-grade USP-certified refined glycerine contract levels were pooling at the upper end of the range.

USP-certified vegetable refined glycerine on an FOB (free on board) US Midwest basis is at 46.50-52 cents/lb ($1,025-1,146/tonne), according to ICIS.

There were some contracts heard to have settled below and above the published range, but the bulk of the market largely fell within the 46.50-52 cents/lb level.

Tallow grade refined glycerine was assessed down on the lower end of the range to 44.50-50.50 cents/lb, as attractively priced product from competitors was present in the market.

Pharmaceutical-grade was assessed at a rollover at 71-77 cents/lb, as contracted prices heard fell mostly within the published ranges.

US buyers continue to closely measure the risk of price volatility later this year when sourcing their supply.

The market seems to be split when looking at the refined glycerine supply scenario for 2014, with many expecting the market to tighten in coming quarters as players question what will happen with the global biodiesel sector and its supply of by-product crude glycerine.

Many participants expect that US biodiesel production will shut down considering stagnant renewable fuel volume blending mandates in the US and the lack of the $1/gal tax credit in 2014.

Additionally, biodiesel margins are nearing zero, according to an analyst, and soy methyl ester (SME) producers are expected to shutter production as long as the margins are slim.

End-use segments in food and beverages, tobaccos, pet foods and industrial tiers are all said to be performing well and underpinning the snugness in the refined segment.

US refined glycerine suppliers include Procter & Gamble, Vantage Oleochemical, Emery Oleochemical, Twin Rivers Technology and Peter Cremer North America.

Major importers include Wilmar, Acme-Hardesty and several trading groups.

By Leela Landress