Oleochemicals
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Argus covers the entire energy and commodities supply chain, feeding insight from its biofuels, agriculture and energy teams into its coverage of oleochemicals to provide you with a full picture.
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Malaysia's February palm oil exports, stocks hit lows
Malaysia's February palm oil exports, stocks hit lows
Singapore, 11 March (Argus) — Malaysian palm oil exports fell to a three-year low in February, along with lower production and a drop in stocks to a seven-month low. Palm oil exports fell by 25pc on the month to 1.02mn t in February, the lowest level since February 2021, according to the Malaysian Palm Oil Board (MPOB). Purchases from price-sensitive countries have fallen as the price discount for palm oil has narrowed compared with rival soft vegetable oils. Average crude palm oil prices delivered to Indian ports rose to $911/t cif in January from $883/t cif in December 2023, while crude soybean oil prices fell to $939/t cif from $976/t cif over the same period, according to the Solvent Extractors' Association of India. Malaysian palm oil inventories also dropped by 5pc on the month to a seven-month low of 1.92mn t in February, falling below the 2mn t threshold for the first time since July 2023, MPOB data show. Market participants look to Malaysia's monthly palm oil stock levels as a gauge for price direction. Malaysia is the world's second-biggest palm oil producer. A drop in production contributed to the export and stock declines. Crude palm oil (CPO) production fell by 10pc on the month to 1.26mn t in February, although output was stable from a year earlier. The month-on-month decline was mainly driven by lower production in the east Malaysian states of Sabah and Sarawak, which are the country's largest palm oil producers. Output fell by nearly 15pc each in Sabah and Sarawak from January to 291,000t and 276,000t respectively. Palm kernel production fell by 12pc on the month to 302,000t in February, while output of crude palm kernel oil fell by 14pc to 139,000t, the MPOB said. Tight palm oil supplies will likely support palm oil prices at relatively high levels over the next three months, analysts forecast last week. Malaysian exports of biodiesel also fell by 28pc on the month to 29,400t in February. Outbound trade of oleochemicals rose to 255,000t, 1pc higher from January, but palm kernel oil exports fell by 19pc on the month to 55,600t in February. By Lauren Moffitt Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazilian pine chemicals group buys Portugal’s Pinopine
Brazilian pine chemicals group buys Portugal’s Pinopine
London, 8 March (Argus) — A Brazilian pine chemicals group has agreed to acquire Pinopine, a Portuguese gum rosin derivatives producer, sources in Brazil and Europe told Argus . Grupo Resinas Brasil (RB), a large Brazilian pine chemicals producer, will probably own an undisclosed, controlling stake in Portugal-based derivatives manufacturer Pinopine, sources said. The deal has already been communicated to Pinopine employees in Portugal, sources familiar with the transaction said. The details of the deal were not disclosed and neither company returned requests for comment. Sources in Brazil and southern Europe said the transaction would give Grupo RB competitive logistics access to the main European consuming regions as Pinopine is located in the Portuguese coastal city of Aveiro, near Porto. Portugal is a key importer of gum rosin from Brazil, which is mainly used as a feedstock for the production of gum rosin esters. Grupo RB also owns Luresa Resinas, a Spanish pine chemicals and derivatives producer. In 2022 the group acquired Barcelona-headquartered gum base supplier Cafosa . Gum base is used as one of the main components for the manufacture of chewing gum. Grupo RB is a Brazilian pine oleoresin, gum rosin, gum turpentine and derivatives producer. Pinopine is a gum rosin derivatives producer. By Leonardo Siqueira Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Viewpoint: US continues shift to palm-based fatty acids
Viewpoint: US continues shift to palm-based fatty acids
London, 20 December (Argus) — US oleochemical producers will continue to switch operations towards palm-based fatty acids at the expense of tallow in 2024. With US buyers now actively opting towards plant-based alternatives for their personal care and cleaning products, producers with the capability have switched their operations to palm. Others are looking to shift production over. And with food habits changing in the US, the rendering of red meats has declined. US Department of Agriculture data show cattle slaughter rates have been trending lower, this provides insight into supplies of the rendered fats used as soaps, animal feed and feedstocks for renewable biofuels and oleochemicals. Approximately 50pc of a slaughtered animal is used for human consumption and the remainder is rendered. Although tallow consumption continues to grow in the US biofuels industry , with biofuels firms having met their mandates for 2023, demand has fallen and US tallow values have declined. But they remain at a premium to palm feedstock costs, which remain the most economical option for oleochemicals producers. The average bleached fancy tallow (BFT) prices was around 46.50¢/lb on 11 December, a significant decline from an average of 67.50¢/lb in the same week in 2022. Average year to date BFT values are at 60.25¢/lb, down from 15.50¢/lb year-on-year, according to Argus data. With palm-based products growing in popularity, the consensus amongst participants is that producers who manufacture purely tallow-based fatty acids risk being priced out of the market. Crude palm oil (CPO) values are far cheaper with average prices around $841/t. With freight rates at depressed levels, the cost of shipping palm oil from southeast Asia is an economical option for producers. US CPO imports have been steadily increasing, and these are likely to grow in 2024 as palm-based production rises. Global Trade Tracker (GTT) data show the US reported 1.32mn t of CPO imports in the January-September period this year. Should CPO imports continue at the same pace throughout the fourth quarter, this would give a yearly total of 1.77mn t, the highest amount imported to the US since GTT records began. Palm-based fatty acids imports to the US are also likely to climb next year, with increases seen since the introduction of EU anti-dumping duties on Indonesian fatty acids imports earlier in 2023. GTT data show fatty acid exports — excluding tall oil fatty acids — from Indonesia to the US were 101,000t in the first six months of 2023, a 17pc increase on the 86,000t that was shipped during the same period a year earlier and almost double the 53,000t exported to the US during the corresponding period of 2021. With consumption from China not anticipated to drastically improve in 2024, the US remains one of the few markets open to shipments of palm-based fatty acids. Many expect imports to the US to continue gaining as a result. By Neha Popat Send comments and request more information at feedback@argusmedia.com Copyright © 2023. Argus Media group . All rights reserved.
Brazil pine oleoresin supply to fall further in 2024
Brazil pine oleoresin supply to fall further in 2024
London, 22 November (Argus) — Brazilian pine oleoresin supply is expected to decline in 2024 as producers continue to grapple with tight margins and lower selling prices. The price weakness has forced many smaller tappers to abandon the market. Brazilian Pinus elliottii pine oleoresin prices fell to 2,900-3,100 reals ($595-636) at the forest in mid-November, down from R6,300-6,500/t during the same month last year. Prices have been on a steady decline since November 2022, with values of gum rosin, a key product obtained from pine oleoresin, softening this year amid weaker downstream activity. "Many smaller producers have left the industry," a Sao Paulo state pine oleoresin producer said. The exodus is largely because of poor tapping economics. Producers and buyers in Sao Paulo state, Brazil's largest producing region, estimate current production costs at the forest at between R2,400/t and R3,000/t. Lower prices and higher tapping costs have squeezed producer margins and weighed on business sentiment, according to market participants. In southern Brazil, another key producing region, pine oleoresin supply fell in August-October as lower selling prices discouraged workers to collect the product, according to one producer. A pine oleoresin buyer said he can only acquire only 15pc of the product he needs because of the reduced availability. With selling prices sometimes below production costs throughout this year, many smaller pine oleoresin suppliers have ended forest lease agreements. Forest owners lease areas for a share of the producer's selling price, which can reach up to 40pc of their revenues. In Sao Paulo state, a producer ended a lease agreement for one of several areas considered unproductive in the current market, a source said. Official data on the number of pine oleoresin producers in Brazil is lacking. But buyers and producers estimate pine oleoresin supply in the 2023-24 tapping season could drop by 20-30pc. Producers obtaining less than 2.5-3 kg/yr of pine oleoresin per tree are expected to struggle the most. "Areas collecting 2.5 kg/yr per tree will stop," the chief executive of a pine chemicals company said. Pine oleoresin is processed into gum rosin, and data from Argus ' Global Trade Tracker (GTT) show Brazilian gum rosin (BGR) exports have also fallen. BGR exports have been declining since 2020 and are now close to levels seen in 2016. They fell from a peak of 97,425t in 2020 to 74,516t in 2022. Gum rosin processors in Brazil are the biggest consumers of pine oleoresin. Brazilian Pinus elliottii pine oleoresin prices have picked up slightly since early November levels on the back of seasonally lower supply and higher bids. But the uptick has not changed the fundamentals for pine tapping as selling prices remain close to production costs, with many still sharing a portion of their revenues with forest owners. Even if pine oleoresin prices increase, allowing for higher margins, it would take time for the producers which left the market to reactivate the forests and increase availability to the market. Reactivating a forest takes about six months as tappers need to prepare the extraction of the raw material months in advance, according to a source. Six-year old forest areas, which could be ready for tapping this year, will likely not add new volumes to the market as forest owners are delaying operations because of the current selling prices, another source added. Higher pine oleoresin prices in recent weeks led to higher-priced gum rosin offers from Brazilian sellers into southern Europe. But one Brazilian supplier said there is no guarantee that pine oleoresin prices will continue increasing as European gum rosin buyers may push back for discounts amid soft downstream demand, which would again pressure prices and margins for pine oleoresin producers in Brazil. By Leonardo Siqueira BGR exports Send comments and request more information at feedback@argusmedia.com Copyright © 2023. Argus Media group . All rights reserved.
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