Brazilian glycerin exports to China reduced

China’s spot crude glycerin prices are likely to remain stable-to-firm in April and May 2013 as a result of limited global supply even though derivatives demand is low, market sources said.
Brazilian sellers are offering crude glycerin derived from a mixture of tallow and vegetable oil feedstock for May loading at US$410-415 per ton (€312-315) CIF (cost, insurance & freight), $10-15 per ton higher than the average April loading offers.
“The supply situation to [the] export market is still short, and the reason for lower availability to China is because Brazil and Europe markets are very strong,” said a Brazilian seller.
Supplies of crude glycerin, a by-product of biodiesel production, from Brazil are likely to be reduced further based on the outcome of the country’s latest biodiesel auction.
Around 488 million liters of biodiesel were sold for May and June delivery, down by about 5.6% from the previous auction for March-April supplies, which in turn would mean less crude glycerin will be produced.
Biodiesel production, based on the volumes committed by buyers, will generate around 48,000 tons of by-product crude glycerin in the next two months, Brazilian sources said.
Argentina, another major supplier of crude glycerin into China, has only been offering sporadic amounts since Europe started an anti-dumping investigation on the country’s biodiesel exports in the first half of 2012. The results are likely to be announced in May 2013, and since anti-dumping duties (ADD) can be applied three months retrospectively, European buyers are cautious about purchasing Argentinian biodiesel, sources said.
As a result, limited by-product crude glycerin could be offered to the Chinese market, which typically imports 30,000 tons of the material each month.
Crude glycerin prices have been rising since January on limited global supply. Prices rose from US$365-380 per ton CIF in early January to US$395-410 per ton CIF on April 10, ICIS data shows.
A Chinese buyer said, “Crude glycerin prices wouldn’t drop as sellers are not in a hurry to sell. It is a sellers’ market now.”
Trader sentiment was mixed, with some expecting crude glycerin prices to stabilize, while others anticipate a steady price uptrend.
Some producers of epicholohydrin (ECH) also purchase imported crude glycerin, refining it domestically, and using it as an alternative feedstock to propylene.
The ECH market in China’s domestic market is oversupplied, sources said.
(April 29, 2013)