Global Glycerine Prices Set to Climb in Major Markets Amid Strong Oleochemical Demand

The global Glycerine market is experiencing a significant upward trend in prices, with both major exporting and importing countries witnessing increases throughout June 2024. This surge in Glycerine prices is primarily driven by strong demand from the oleochemical industry, coupled with supply constraints and rising production costs.

In Malaysia and Indonesia, the two largest Glycerine-producing regions, prices for both crude and refined grades have consistently climbed since mid-June. Market analysts attribute this trend to heightened domestic and international demand, with traders actively purchasing at elevated prices. The oleochemical sector's growth plays a crucial role, as Glycerine is a key component in this industry.

The increasing preference for oleochemicals as eco-friendly alternatives to petroleum-based products in various sectors has further boosted Glycerine demand. A supply-demand imbalance, characterized by limited availability and moderate inventory levels, continues to support price increases. Additionally, rising production costs, particularly due to escalating energy expenses amid global demand uncertainties, contribute to the overall price surge of Glycerine.

The Malaysian palm oil market, a primary raw material source for Glycerine, has also seen steady price increases. This is due to growing regional and overseas demand, the relative attractiveness of palm oil compared to other edible oils, and anticipated supply tightening from Malaysia and Indonesia in late 2024. Market experts report that Malaysia's palm oil production increased by 9% (626,000 tonnes) and exports rose by 7% (393,000 tonnes) from January to May 2024. However, this increased production has been outpaced by robust demand, leading to limited stocks in the country.

In importing regions such as Europe, the Middle East, and Asia, Glycerine prices have been increasing in recent weeks and are expected to rise further due to the upward trend in exporting regions. The situation is exacerbated by rising shipping costs, which have disrupted many customers' purchasing plans and caused unnecessary losses for both customers and suppliers including the Glycerine market.

Supply chain bottlenecks, including the drought affecting the Panama Canal and reduced vessel traffic, have constrained capacity and increased transportation costs, impacting Glycerine prices. Soaring freight rates, container shortages, and longer lead times have further compounded challenges for importers. The implementation of a General Rate Increase (GRI) by shipping carriers in May has further increased shipping costs.

Looking ahead, the Glycerine market may experience additional price increases due to ongoing supply constraints, rising demand for oleochemical products, and increasing palm oil prices. Market participants are advised to remain vigilant, closely monitoring raw material costs, energy prices, and global demand trends to navigate this dynamic market environment effectively.