SINGAPORE--The market for Asian palm methyl ester (PME) remains stagnant as the impending cold weather dries up demand from blenders in Europe and the US, sources said on Thursday.
While the recent plunges in feedstock vegetable oil values might have boosted the appeal of PME as a substitute to conventional fossil fuels, in reality weak demand from end-users continued to stem trade, most sellers said.
The benchmark November crude palm oil delivery contract on Bursa Malaysia was trading at ringgit (M$) 2,477/tonne ($735/tonne), around 44% lower than its high of M$4,486/tonne just five months back.
"We cannot find any buyers for PME now, not in the US, not in Europe," one regional producer said, adding that even if they lowered their prices, PME s cold filter plugging point (cfpp) was too high for buyers to accept.
Some Asian sellers also pointed out uncertainties from buyers in the US market regarding the implementation of a new American Society for Testing and Materials (ASTM) cold soak regulation for biodiesel use. PME was reportedly unable to pass this test without undergoing further processing, they said.
Other market sources however said that the current lull was seasonal and nothing out of the ordinary for the PME industry.
"The volume of PME drops every year at around this time, demand traditionally falls as requirements for higher cfpp material is lower," a Malaysia-based trader said, adding that as demand for PME fell, requirements for soy, rapeseed and coconut based methyl esters would increase.
South Korean demand for PME was also lacklustre, as biodiesel remained primarily a summer product, with government laws specifying that only lower cfpp material could be blended in diesel after summer ends in late-August.
The marketing manager of one large regional producer offered a different view however; pointing out that the company had shipped a huge quantity of PME in recent weeks.
"You just have to find your market," he said, declining to elaborate on which regions he was shipping to.
Regional PME producers in Asia include Wilmar, Vance Bioenergy, Caratino, and Nexsol.
While the recent plunges in feedstock vegetable oil values might have boosted the appeal of PME as a substitute to conventional fossil fuels, in reality weak demand from end-users continued to stem trade, most sellers said.
The benchmark November crude palm oil delivery contract on Bursa Malaysia was trading at ringgit (M$) 2,477/tonne ($735/tonne), around 44% lower than its high of M$4,486/tonne just five months back.
"We cannot find any buyers for PME now, not in the US, not in Europe," one regional producer said, adding that even if they lowered their prices, PME s cold filter plugging point (cfpp) was too high for buyers to accept.
Some Asian sellers also pointed out uncertainties from buyers in the US market regarding the implementation of a new American Society for Testing and Materials (ASTM) cold soak regulation for biodiesel use. PME was reportedly unable to pass this test without undergoing further processing, they said.
Other market sources however said that the current lull was seasonal and nothing out of the ordinary for the PME industry.
"The volume of PME drops every year at around this time, demand traditionally falls as requirements for higher cfpp material is lower," a Malaysia-based trader said, adding that as demand for PME fell, requirements for soy, rapeseed and coconut based methyl esters would increase.
South Korean demand for PME was also lacklustre, as biodiesel remained primarily a summer product, with government laws specifying that only lower cfpp material could be blended in diesel after summer ends in late-August.
The marketing manager of one large regional producer offered a different view however; pointing out that the company had shipped a huge quantity of PME in recent weeks.
"You just have to find your market," he said, declining to elaborate on which regions he was shipping to.
Regional PME producers in Asia include Wilmar, Vance Bioenergy, Caratino, and Nexsol.
