SINGAPORE--The bear rampage in Asian refined glycerine spot pricing seems to have finally eased, with some sellers confident that prices have finally bottomed out, market sources said on Tuesday.
Glycerine prices in Asia had fallen by more than 50% from its heyday, when drummed values hit a multi-year high just under the $2,000/tonne FOB (free on board) southeast (SE) Asia mark earlier this year.
Since then, glycerine has spiralled downwards, with current prices assessed at $840-950/tonne FOB SE Asia, according to global chemicals intelligence service, ICIS pricing.
This stunning plunge was attributed to a worldwide oversupply of the commodity due to increased production of biodiesel and stagnant glycerine demand.
"Prices have fallen so quickly over the past few months that the buyers are all staying away from the market, nobody wants to take any cargoes," the marketing executive of one large regional refined glycerine producer said, pointing out that buyers had the upper hand in most negotiations now.
However, some market players believed that improving supply/demand fundamentals could help curb further price dips.
Some sellers believed that the supply overhang would be curtailed during the impending winter months in the US and Europe on a lull in biodiesel production, which would limit crude glycerine availability.
There is a seasonal fall in exports of Asian palm-based biodiesel to the West during winter, as the relatively higher cold filter plug point (cfpp) of palm methyl esters renders them unsuitable for use in cooler climates.
With buying interest for crude glycerine from the animal feed industry intensifying as winter approached, market sources also said that demand from this industry could soak up the excess material in the region, helping to support crude glycerine prices.
"If [the price of] crude [glycerine] goes up, refined material will not be able to fall much further," the trading manager of a glycerine refiner based in Malaysia said.
Demand was also approaching its seasonal peak, as cold weather in the northern hemisphere traditionally entailed higher refined glycerine requirements for end-users in the cosmetics and anti-freeze industries, producers said.
Talk that buyers in China, one of the region s largest consumers of glycerine, could kick-start their purchases after the Olympics in August after absenting themselves from the refined glycerine market in recent months also helped to keep price forecasts from market constituents more optimistic.
"As soon as China returns, I think the market will recover somewhat - they re a huge factor," one Singapore-based seller said.
Major refined glycerine producers in Asia include IOI Oleochemical, Procter and Gamble, Natural Fuels, Kuala Lumpur Kepong (KLK) and Musim Mas.
Glycerine prices in Asia had fallen by more than 50% from its heyday, when drummed values hit a multi-year high just under the $2,000/tonne FOB (free on board) southeast (SE) Asia mark earlier this year.
Since then, glycerine has spiralled downwards, with current prices assessed at $840-950/tonne FOB SE Asia, according to global chemicals intelligence service, ICIS pricing.
This stunning plunge was attributed to a worldwide oversupply of the commodity due to increased production of biodiesel and stagnant glycerine demand.
"Prices have fallen so quickly over the past few months that the buyers are all staying away from the market, nobody wants to take any cargoes," the marketing executive of one large regional refined glycerine producer said, pointing out that buyers had the upper hand in most negotiations now.
However, some market players believed that improving supply/demand fundamentals could help curb further price dips.
Some sellers believed that the supply overhang would be curtailed during the impending winter months in the US and Europe on a lull in biodiesel production, which would limit crude glycerine availability.
There is a seasonal fall in exports of Asian palm-based biodiesel to the West during winter, as the relatively higher cold filter plug point (cfpp) of palm methyl esters renders them unsuitable for use in cooler climates.
With buying interest for crude glycerine from the animal feed industry intensifying as winter approached, market sources also said that demand from this industry could soak up the excess material in the region, helping to support crude glycerine prices.
"If [the price of] crude [glycerine] goes up, refined material will not be able to fall much further," the trading manager of a glycerine refiner based in Malaysia said.
Demand was also approaching its seasonal peak, as cold weather in the northern hemisphere traditionally entailed higher refined glycerine requirements for end-users in the cosmetics and anti-freeze industries, producers said.
Talk that buyers in China, one of the region s largest consumers of glycerine, could kick-start their purchases after the Olympics in August after absenting themselves from the refined glycerine market in recent months also helped to keep price forecasts from market constituents more optimistic.
"As soon as China returns, I think the market will recover somewhat - they re a huge factor," one Singapore-based seller said.
Major refined glycerine producers in Asia include IOI Oleochemical, Procter and Gamble, Natural Fuels, Kuala Lumpur Kepong (KLK) and Musim Mas.
