Advanced BioFuels USA

by Samantha Wright (Independent Commodity Intelligence Services) European glycerine spot prices faced triple digit increases this week as availability tightened significantly, with players concerned that upstream biodiesel production will fall further through the second quarter.

Refined vegetable glycerine prices shot up €130/tonne on the low end and €230/tonne on the high end to €670-900/tonne FD (free delivered) NWE (northwest Europe).

Availability of refined vegetable non-genetically modified origin (non-GMO) material tightened exponentially on the back of the significant decrease in biodiesel production in the region.

There was also talk that Oleon has announced a force majeure on all non-GMO glycerine, though there has been no confirmation from the company as of yet.

…

Tallow and technical vegetable prices were also impacted by the limited supply on the back of upstream production cuts, though to a slightly lesser extent than refined vegetable prices.

…

There is little to no material being imported from southeast Asia currently due to logistical issues moving material into Europe, as well as a lockdown in Malaysia forcing some oleochemical plants in the country to shut.

…

The lack of demand for fuels in Europe, coupled with extremely low – and in some cases negative – margins has led biodiesel producers to cut and in some cases completely stop production.

Some players have already cut capacity by 50%, while there are several plants said to have shutdown for an unspecified amount of time.

Because glycerine is a by-product of biodiesel, a number of glycerine sellers have stopped all spot sales at the beginning of April in order to assess how much material will be available.

…

It is likely that biodiesel production in the region will remain reduced for most of the second quarter.

One glycerine seller said: “Why we hear it [has turned] so quickly is biodiesel producers don’t have any off take for biodiesel right now. Demand has collapsed, there is no external storage space left in Europe.

“There are 30,000 tonne cargo vessels being rerouted into Europe from Asia because they can’t dock there, and when they dock here they need to store it. So producers have to lower their utilisation rates in the plant because the customers have nowhere to put the product.”

…

Demand remains good, with a slight increase seen in interest for use in sanitizer applications, though glycerine is a small component of most sanitizer products.

There has been a drop in demand for industrial applications, with the rubber and antifreeze industries taking a knock from falling automotive demand.  READ MORE