Initial Q1 and 2012 contracts settled
The European glycerine market fundamentals remain healthy with strong demand and sufficient supply available in the region. Supply is expected to tighten over the coming months as imported material, especially from Asia, evaporates because of the regional price disparity, sources say. Despite this, a number of end-users are hesitant about settling 2012 contracts.
Nonetheless, some contract business for Q1 and 2012 has been settled in Europe. One major producer fixed some Q1 contracts for refined vegetable grade at €600/tonne FD NWE. For tallow grade, some Q1 contracts were fixed at €550-570/tonne FD, sources said. Other suppliers have agreed 2012 contracts for refined vegetable grade with customers in Denmark at just under €500/tonne FD and to buyers in the UK at about €585/tonne FD. Some buyers located in northwest Europe say they are seeking to fix Q1 contracts for kosher vegetable grade at just under €500/tonne FD.
Spot market
Spot prices for refined vegetable grade have risen slightly on good demand and limited supply, sources said. Demand for GMO vegetable grade which can be used for anti-freeze applications may increase as the winter season starts in the northern hemisphere. Imports of southeast Asian vegetable grade have thinned because of the price differentials, some buyers report. Offers of southeast Asian material at above $800/tonne FOB southeast Asia are deemed too expensive when compared with European origin product.
Crude glycerine prices remain steady with material made from used cooking oil methyl ester (UCOME) production sold at the lower end of the listed range while kosher, non-GMO crude is being sold at the higher end. Supply of crude glycerine produced as a result of UCOME production is expected to rise because anti-freeze makers will start purchasing this grade as the winter kicks in, sources said.
A deal for kosher grade crude was heard done as high as €340/tonne FD NWE, but prices this high were not widely confirmed.
Argentinean crude glycerine of GMO grade is reportedly available in the Mediterranean but prices were not available.
Tallow grade glycerine has been heard done at the lower end of the listed range. Demand for tallow is stable but not as buoyant as vegetable grade because of its limited applications.
Covering editor: Renee Lawrence
($1 = €0.74)
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