European animal fat prices rebounded in early March and continued to increase in April, supported by increased demand and competitiveness against vegetable oils, which jumped due to the war in the Middle East and crude oil rally, commodity price reporting agency Fastmarkets wrote.
The upturn in animal fat prices followed a six-month period of stagnation and a downward price movement, the 7 May report said.
Orders for animal fats in Europe for use in pet food, animal feed production and the oleochemical industry increased, with buyers substituting vegetable oil volumes, according to sources quoted in the report.
The European fats sector’s export potential improved after US-based biofuel producers returned to the import market for feedstocks amid a financial advantage and in anticipation of the US Environmental Protection Agency setting 2026/2027 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS), Fastmarkets wrote.
After the US Environmental Protection Agency (EPA) announced record-high RVOs on 27 March, local prices for US-origin animal fat jumped, increasing the demand for imported material further.
“Everything happened at once in the commodities markets. Animal fats did not show much reaction to the war, but followed the rally of other products, with sudden buying interest boosting prices,” a Europe-based trader told Fastmarkets.
Overall, 5-15% free fatty acid (FFA) animal fat prices in the FOB Amsterdam, Rotterdam, Antwerp (ARA) market increased by more than €100 (US$116)/tonne month-on-month – a rise of 10% – based on deals reported for April-June loading in the range of €910-€1,050 (US$1,066-US$1,230)/tonne FOB.
Amid ongoing demand in the local and export markets, further selling interest for July was reported at €1,100-€1,110 (US$1,275-US$1,287)/tonne FOB ARA.
“With Brazilian tallow flow to the US now restored, no cargoes are coming to Europe from South America; demand is strong, so there are no bearish factors for the European market,” a source told Fastmarkets.
Based on market information, Fastmarkets revised its weekly category 3 mixed animal fat, 15% free fatty acid (FFA), minimum 97% purity, delivery duty paid (DDP) Northwest Europe price assessment at €990 (US$1,148)/tonne on Thursday 23 April, up by €10 (US$11.59)/tonne week-on-week from €980 (US$1,136)/tonne on 16 April.
The assessment was an increase of €85 (US$98.52)/tonne, or 9.39%, from 5 March, when prices first jumped after a long period of downtrend movement.
Fastmarkets assessed its weekly category 3 bone fat, 5% ffa, 98%, ddp Northwest Europe price at €1,040 (US$1,205)/tonne on 7 May, up by €30 (US$34.77)/tonnes week on week and by €70 (US$81.14)/tonne, or 7.21%, from 5 March.
