Glycerin market in 2008 is a tale of two grades: Crude vs. refined

Purchasing.com

Refined glycerin prices shoot up, while crude glycerin prices tick down in an unlikely market trend
By Gordon Graff -- Purchasing, 9/11/2008

Prices of crude and refined glycerin often move along parallel tracks, but this year they have headed off in radically different directions. A robust domestic demand for refined glycerin, coupled with limited domestic refining capacity has caused U.S. prices of the refined product to shoot up dramatically since the start of 2008 (see chart). Meanwhile, Chinese demand for U.S.-made crude glycerin has recently dried up, causing the crude material to pile up in the U.S. and sending prices downward.

Both situations are likely to be temporary, however, as a cooling U.S. economy, the credit crunch and declining commodity prices should help put a cap on runaway refined glycerin prices during the next year, say analysts. As for crude glycerin, demand in the next year will be buoyed by two factors: a likely resumption in Chinese buying, and the start-up of huge new plants in the U.S. that will convert the crude glycerin into industrial chemicals. Both developments may boost prices for the crude material.

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