Market situation glycerine
Today we would like to inform you about the current market situation for the product glycerine. At present, quantities are hardly available and prices are currently rising sharply from a historically low quotation. The situation is confusing, as various factors are currently coinciding.
Background on glycerine production
Glycerol in its refined form - as glycerol 99,5 % EP product - is produced from so-called crude glycerol. The raw glycerine in turn is obtained from various sources. The most important source today is biodiesel production. In the production of biodiesel from vegetable fats, crude glycerine is produced as a by-product, so to speak. The base oils for this are rapeseed oil but also palm oil or soya oil. Depending on the oil, GMO-free or non-GMO-free biodiesel and crude glycerine are obtained.
Current glycerine situation Capacities and prices
Historically, prices for crude glycerine have been at a very very low level in the last months of 2019. Even experts with many years of experience in the glycerine trade have never seen such low prices. Over time, this led to some producers of biodiesel and raw glycerine having to give up. As a result, capacities were lost. In the short term, this has not yet had any impact on prices.
In the course of the global corona crisis, the prices for crude oil have now fallen very sharply. It therefore no longer makes sense in terms of price to add biofuels to petrol and other fuels. Wherever possible, smaller quantities of bioethanol are currently being added to fuels. Therefore, a very large amount of demand is almost suddenly eliminated.
In addition to this situation, there is an extremely abrupt and sharp drop in demand for fuels worldwide. Significantly less car traffic and an almost complete cessation of air traffic in Europe have caused the demand to collapse overnight. As a result, demand for biofuels has also fallen dramatically. This has resulted in greatly reduced capacity for raw glycerine and thus an extreme increase in price.
Outlook for contracts and deliveries of glycerine 99.5
At present, only contracts already in progress are being serviced. We are monitoring the situation and hope for an early improvement. However, in the short term, we see low availability and higher prices of glycerine as inevitable.
However, we see this time as a wake-up call to secure demand from various sources and would be pleased if you would release us as a supplier during this time in order to be served reliably in the long term. Please contact us for individual offers. Small quantities - also as samples for larger requirements - are available at short notice.
