Supply Chain Council of European Union | Scceu.org
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US Q3 glycerine contracts assessed at a sharp increase following major Q2 supply chain disruptions

HOUSTON (ICIS)–US Q3 glycerine contracts were
assessed at a sharp increase from Q2 following
major supply chain disruptions during the
quarter.

Q2 spot prices surged, tracking a sharp
increase in demand for hand sanitizers
alongside major disruptions to the supply chain
amid the onset of the coronavirus pandemic.

Traditional manufacturers and non-traditional
players like distillers emerged amid the onset
of the pandemic to boost hand sanitizer
production to mitigate the spread of the virus.

However, the pandemic caused major supply chain
disruptions globally – particularly in
southeast Asia, the major regional supplier of
US imports.

Approximately 30% of domestic vegetable
glycerine consumed in the US is imported, and
many large multinationals have significant
volumes of their supply chains tied to foreign
production.

Supply insecurity led to a notable increase in
demand for domestic soy- and tallow-based
material among manufacturers that traditionally
have non-GMO formulations for and prefer
non-GMO labelling on their products.

Domestic production from large,
fully-integrated biodiesel producers as well as
vegetable- and tallow-based oleochemical
producers has largely remained in tact during
the pandemic.

This combination of factors prompted increased
demand for domestically-produced vegetable- and
tallow-based glycerine and putting upward
pressure on the wider market, underpinning the
Q3 negotiations.

US Q3 refined vegetable glycerine contracts
were assessed higher at 47-62 cents/lb FOB
(free on board) Midwest.

The quote for refined vegetable-based glycerine
includes prices for GMO and non-GMO product.
Prices for GMO product were typically toward
the bottom-end of the range, while prices for
non-GMO product were typically in a range from
the low 50s to the top-end of the range.

Refined tallow glycerine contracts were
assessed higher at 45-60 cents/lb FOB Midwest.

Pharmaceutical-grade glycerine contracts were
assessed higher at 77-92 cents/lb FOB Midwest.

Q3 contract settlements were largely heard
within the posted ranges, although some
settlements were also heard above and below
ICIS’ assessments.

ICIS Editorial Chart goes here

Glycerine is mainly used in personal and oral
care products such as skincare creams,
toothpastes and mouthwashes, as well as food
products either as glycerine directly or one of
its derivatives such as glycerol mono-stearate.

Click
here
to view the ICIS Coronavirus, oil
price crash – impact on chemicals topic
page.

Thumbnail photo by Design Pics
Inc/REX/Shutterstock

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