This exclusive update delivers a concise overview of the fatty acids and alcohols markets, sharing insight into:
- Palm and lauric oil prices, analysis and outlook
- Glycerine quarterly contracts, supply & demand discussion and trade flow analysis
- Fatty alcohols quarterly outlook trends and in depth trade analysis
- Fatty acids price outlook, trade data and feedstock analysis
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Swedish TOFA exports to US at record in 1H
Swedish TOFA exports to US at record in 1H
London, 18 September (Argus) — Sweden's tall oil fatty acids (TOFA) exports to the US rose to an all-time high in the first half of 2024 owing to tighter US domestic supplies. Swedish TOFA supply to the US totalled 9,960t from January to June this year, Global Trade Tracker (GTT) data show, the highest since the start of the dataset in 2015. Sweden, a key European TOFA supplier, sent 3,196t to the US in January, 3,364t in April and 3,080t in June, and some marginal amounts in February, March and May, according to the GTT data. US crude tall oil (CTO) feedstock refining capacity declined this year, limiting TOFA output. US specialty chemicals producer Ingevity shut down a CTO fractionation facility in DeRidder, Louisiana, earlier this year and converted its Crossett, Arkansas, site to run 100pc on non-tall oil feedstocks in 2023. These reduced US CTO refining capacity by around 30pc and shortened local TOFA supply, market sources said. Reduced US TOFA supply has encouraged local buyers to seek alternatives, including importing from countries like Finland. A Finnish supplier has sent some to the US and is considering sending more in the coming months. TOFA is a fraction obtained by the distilling of CTO and can be used into alkyd resins, coatings, dimer acids, fuel additives, lubricants, oilfield chemicals, and biofuels, among other applications. By Leonardo Siqueira Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil turpentine shipments delayed by port backlogs
Brazil turpentine shipments delayed by port backlogs
London, 25 July (Argus) — Brazilian gum turpentine export shipments are being delayed by isotank availability that is significantly tightening owing to difficult booking schedules and port congestion in Asia-Pacific. Delays are close to a month for shipments going to India, sources said. In some cases vessels have been at a port for weeks, adding to delays caused by difficult booking schedules. With a number of Brazilian ports handling more goods than before, including Brazil's key port for pine chemicals exports Santos where cargo in the first half of 2024 hit a record for the period. There has also been congestion at Asian ports. "There is chaos in southeast Asia," a buyer in Asia said. "Ship lines confirm bookings just to cancel them later." India is Brazil's largest gum turpentine buyer, with most going into the camphor and aroma chemical markets during peak season in the second half of the year. India imported 12,509t of gum turpentine from Brazil in 2023, Global Trade Tracker (GTT) data show, the second highest since at least 2015. In 2022, India imported a record 12,944t of Brazilian gum turpentine, according to GTT. Volatile gum turpentine freight rates from Brazil to India has now incentivised several Brazilian suppliers to shift from cif to fob-based sales to avoid the risk of unpredictable isotank costs. Gum turpentine freight rates from Brazil to India have risen to around $7,000-7,500 per isotank from $2,500-3,000 levels in January 2024, one customer said. The escalating freight rates continue to put upwards pressure on the Brazil gum turpentine market, with prices rising amid steady demand from India, the US and Mexico. Brazilian Pinus elliottii gum turpentine spot export prices were assessed at $2,200-$2,250/t fob, Brazil port, on 15 July, up by more than 25pc from $1,650-$1,800/t fob, Brazil port, at the same time last year. The export prices are higher this year because of stronger demand from the US flavours and fragrance market, firm business activity into India and Mexico and lower buyer stocks. By Leonardo Siqueira Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Feedstock imports shake up US biofuel production
Feedstock imports shake up US biofuel production
New York, 24 July (Argus) — Waste from around the world is increasingly being diverted to the US for biofuel production, helping decarbonize hard-to-electrify sectors like trucking and aviation. But as refiners turn away from conventional crop-based feedstocks, farm groups fear missing out on the biofuels boom. Driven by low-carbon fuel standards (LCFS) in states like California, US renewable diesel production capacity has more than doubled over the last two years to hit a record high of 4.1bn USG/yr in April according to the Energy Information Administration. Soybean and canola processors have invested in expanding crush capacity, expecting future biofuels growth to lift vegetable oil demand. But policymakers' growing focus on carbon intensity, a departure from the long-running federal renewable fuel standard (RFS) that sets volume mandates for broad types of fuel, primarily benefits waste feedstocks, which generate larger LCFS credits because they are assessed as producing fewer emissions. Argonne National Laboratory's GREET emissions model, which has been modified by federal and California regulators for clean fuels programs, factors in emissions sources like fertilizers and diesel use on farms for virgin vegetable oils but not for used oils sourced from cooking operations. Refiners trying to maximize government subsidies are thus sourcing waste-based feedstocks from wherever they can find them. Through May this year, imports to the US under the tariff code that includes used cooking oil (UCO) and yellow grease rose 90pc from year-prior levels to more than 1.8bn lb (844,000t). While China represents most of that, sources are diverse, with significant sums coming from Canada, the UK, and Indonesia. Imports of inedible and technical tallow, waste beef fat that can be turned into biofuels, have also risen 50pc so far this year to 800,000lb on ample supply from Brazil. While soybean oil was responsible for nearly half of biomass-based diesel production in 2021, that share has declined to around a third over the first four months this year as imports surge (see graph). "Every pound of imported feedstock that comes in displaces one pound of domestically sourced soybean oil or five pounds of soybeans," said Kailee Tkacz Buller, chief executive of the National Oilseed Processors Association. Even as LCFS and RFS credit prices have fallen over the last year, hurting biofuel production margins and threatening capacity additions , imports have not slowed. Feedstock suppliers, many from countries with less mature biofuel incentives and limited biorefining capacity, might have few options domestically. And exporting to the US means they can avoid the EU's more prescriptive feedstock limits and mounting scrutiny of biofuel imports. More ambitious targets in future years, particularly for sustainable aviation fuel, "will create a lot of competition for UCO in the global market," said Jane O'Malley, a researcher at the International Council on Clean Transportation. But for now, "the US has created the most lucrative market for waste-based biofuel pathways." Incentives for US refiners to use waste-based feedstocks will only become stronger next year when expiring tax credits are replaced by the Inflation Reduction Act's 45Z credit, structured as a sliding scale so that fuels generate more of a subsidy as they produce fewer greenhouse gas emissions. While essentially all fuel will receive less of a benefit than in past years since the maximum credit is reserved for carbon-neutral fuels, the drop in benefits will be most pronounced for fuels from vegetable oils. Granted, President Joe Biden's administration wants the 45Z credit to account for the benefits of "climate-smart" agriculture, potentially helping close some of the assessed emissions gap between crop and waste feedstocks. But the administration's timeline for issuing guidance is unclear, leaving the market with little clarity about which practices farmers should start deploying and documenting. "While a tax credit can be retroactive, you can't retroactively farm," said Alexa Combelic, director of government affairs at the American Soybean Association. Squeaky wheel gets the soybean oil The concerns of agricultural groups have not gone unnoticed in Washington, DC, where lawmakers from both parties have recently called for higher biofuel blending obligations, prompt 45Z guidance, and more transparency around how federal agencies scrutinize UCO imports. There are also lobbying opportunities in California, where regulators are weighing LCFS updates ahead of a planned hearing in November. At minimum, agricultural groups are likely to continue pushing for more visibility into the UCO supply chain, which could take the form of upping already-burdensome recordkeeping requirements for clean fuels incentives and setting a larger role for auditors. Fraud would be hard to prove, but two external groups told Argus that the Biden administration has indicated that it is looking into UCO collection rates in some countries, which could at least point to potential discrepancies with expected supply. More muscular interventions, including trade disincentives, are also possible. Multiple farm associations, including corn interests frustrated that the country's first alcohol-to-jet facility is using Brazilian sugarcane ethanol , have asked the Biden administration to prevent fuels derived from foreign feedstocks from qualifying for 45Z. The possible return of former president Donald Trump to the White House next year would likely mean sharply higher tariffs on China too, potentially stemming the flow of feedstocks from that country — if not from the many others shipping waste-based feedstocks to the US. Protectionism has obvious risks, since leaving refiners with fewer feedstock options could jeopardize planned biofuel capacity additions that ultimately benefit farmers. But at least some US agriculture companies, insistent that they can sustainably increase feedstock production if incentives allow, see major changes to current policy as necessary. By Cole Martin Waste imports crowd out soybean oil Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Malaysia’s palm oil stocks up slightly in May
Malaysia’s palm oil stocks up slightly in May
London, 10 June (Argus) — Malaysia's palm oil stocks increased slightly at the end of May from the previous month, as growth in production outpaced exports, according to data from the country's palm oil board (MPOB). Total Malaysian palm oil inventories rose to 1.75mn t at the end of May, a 0.5pc increase from April. Crude palm oil production rose by 14pc on the month to 1.7mn t, as peak harvest season commenced. Market participants watch palm oil stock levels to gauge supply-demand dynamics. Malaysia's monthly releases are tracked more closely, as data on its palm oil industry are considered the most reliable. The country is the second-largest palm oil producer globally after Indonesia. The country's palm oil exports rose by 12pc from April to 1.38mn t in May, according to the MPOB. Exports rose despite a recent increase seen in palm oil prices, which has caused its discount to rival soybean, sunflower and rapeseed oils to narrow, and has driven a decline in sales to some price-sensitive markets like India. Palm kernel production rose by 11pc on the month to 408,000t, while output of crude palm kernel oil rose by 26pc to 194,000t. Exports of biodiesel fell by 41pc on the month to 20,900t. External sales of oleochemicals rose by 10pc on the month to 257,400t, while exports of palm kernel oil moved up slightly from April to 87,800t. By Carolina Palma Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
