Both the US and global glycerine markets are teetering with a delicate supply/demand balance, but the situation may be improving in the second half (H2) of 2018.
In the USA, most domestic producers of both vegetable and tallow-based glycerine were sold out and fully contracted for the third quarter and buyers feared that any supply disruption could spike prices, wrote ICIS on 18 July.
“There was a Midwest producer who had a plant issue in the first quarter and that caused some of their buyers to frantically try to source material and was one of the reasons the market tightened up so quickly in Q1,” a seller told ICIS.
Globally, however, spot markets were beginning to reflect the easing supply situation, with glycerine supplies from Southeast Asia growing more comfortable as biodiesel producers increased their output due to higher demand stemming from rising oil prices.
In Europe, upstream biodiesel imports were expected to slow down as uncertainty continued over the EU’s possible new import duties on Argentine biodiesel.
Both biodiesel producers and glycerine refiners in Argentina were expecting the EU to impose new tariffs on biodiesel imports in H2, possible in September or October.
On 24 May, the European Commission began registering Argentinian biodiesel imports for the next nine months in order to be able to retroactively impose tariffs on those imports, should the current subsidy case find Argentina was unfairly subsidising its biodiesel industry.
Argentina expected to export around 700,000 tonnes of biodiesel to Europe in 2018, but EU tariffs could derail that plan and consequently also affect global glycerine supply, said ICIS.
The country’s biodiesel and crude glycerine production declined sharply by 20.3% in Q3 2017 as the USA imposed 72% tariffs on Argentine biodiesel in November 2017.
US glycerine suppliers include ADM, Cargill, Emery Oleochemical, Future Fuels, Louis Dreyfus, Owensboro Grain, Peter Cremer North America, Procter & Gamble, Twin Rivers Technology and Vantage Oleochemical.