US glycerine market finely balanced
The US glycerine markets are seeing finely balanced supply/demand dynamics as the second half of 2018 ramps up. Market participants are trying to gauge supply tightness in coming months, and the supply/demand balance is delicate. While the domestic supply situation remains snug, spot markets globally are starting to reflect the easing supply situation. Glycerine supply continues to lengthen in southeast Asia with biodiesel producers ramping up production due to higher biodiesel demand as a result of a narrower price gap between palm oil and gasoil.
Most biodiesel plants produce crude glycerine at a 1:10 ratio, while additional costs will have to be incurred to process the product into refined glycerine. Argentine biodiesel and crude glycerine production was sharply affected when the US imposed tariffs on Argentine biodiesel in November 2017. Tariffs on Argentinean biodiesel were set at over 72%, as required by the US Department of Commerce in November 2017. Following the closure of the US biodiesel market to Argentine volumes, biodiesel production in Argentina declined by 20.5% in Q3 2017.