European glycerine spot prices have tripled amid fears that upstream biodiesel production will fall further due to coronavirus movement restrictions, the Independent Commodity Intelligence Services (ICIS) reported on 3 April.
Glycerine is a by-product of biodiesel production and lack of demand for fuels in Europe due to the novel coronavirus (COVID-19) outbreak restricting travel has led some biodiesel producers to cut or stop production.
ICIS said refined vegetable glycerine prices had shot up €130-230/tonne to €670-900/tonne FD (free delivered) NWE (northwest Europe) in the week ending 3 April. Refined tallow/technical vegetable glycerine values also jumped €100-210/tonne to €500-670/tonne FD NWE. Crude glycerine prices rocketed by €150/tonne to €310-480/tonne FD NWE.
ICIS said there was little to no material being imported from southeast Asia due to logistical issues moving material into Europe, as well as a lockdown in Malaysia forcing some oleochemical plants in the country to shut.
“Any material that can leave southeast Asia bound for Europe will take at least 40 days to reach its destination.”
ICIS said it was likely that biodiesel production in the EU would remain reduced for most of the second quarter.
“Biodiesel producers don't have any offtake for biodiesel right now,” ICIS quoted one glycerine sellers as saying. “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.”
ICIS said glycerine demand remained healthy, with a slight increase seen in interest for use in sanitiser applications, though glycerine was a small component of most sanitiser products.
Glycerine was mainly used in personal and oral care products such as skincare creams, toothpastes and mouthwashes, as well as food products either as glycerine directly or one of its derivatives such as glycerol mono-stearate.
There had been a drop in demand for industrial applications, with the rubber and antifreeze industries taking a knock from falling automotive demand.