OUTLOOK ’17: US glycerine market could see more balance

By Leela Landress de Perez

BUENOS AIRES, Argentina (ICIS)–Prospects for a more balanced markets are looking better for glycerine in the coming year.

The US glycerine market is facing structural changes amid new food safety requirements and price stabilisation prompting increasing substitution into polyols and glycols markets.

The US Food and Drug Administration (FDA) Food Safety Modernisation Act (FSMA) is considered some of the most sweeping reform in food safety laws in more than 70 years. It aims to ensure the US food supply is safe by shifting the focus from responding to contamination to preventing it.

(Source: USDA)

Glycerine is considered a high-risk ingredient and FSMA applies to glycerine destined for human and animal consumption.

Sellers described a widening differential between oleochemical and biodiesel-derived glycerine and attributed it to consumption coming from a sector where FSMA would apply – the pet food sector.

Refined glycerine was oversupplied in 2016, but in 2017 prospects for expanded end-use in glycols substitution is gaining attention and offering demand growth.

As the US refined glycerine market has seen lower pricing in recent years and looks to be achieving some stability in the 30s cents/lb range, increased substitution has been heard into the polyols and glycols tiers with more expected to emerge in 2017.

Buyers in the polyols and glycols are said to be moving forward with some substitution in favour of glycerine in their formulations.

In 2012, a set of specification standards for a glycerine grade to be used in engine coolants was ratified by ASTM International (formerly known as the American Society for Testing and Materials).

Several ASTM engine coolant glycerine specification sets continue to be in various stages of development.

US refined glycerine suppliers include Procter & Gamble, Vantage Oleochemical, Emery Oleochemical, Twin Rivers Technology, Peter Cremer North America, ADM, Cargill, Owensboro Grain, Louis Dreyfus and Future Fuels.

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