Downstream demand is weak, glycerol market shipments slow down

Recently, there is news that a downstream epichlorohydrin plant will start operation. Market participants believe that epichlorohydrin prices may fall. Affected by this, the delivery speed of the glycerin market has slowed down and firm transactions have decreased.

Cost support, low-priced supply of glycerol is difficult to find in the market. The international oil price is still below US$30/barrel, there is little room for biodiesel development, device startups are low, and crude glycerol production has not been produced in large quantities. Supply is tight, and crude glycerin prices continue to remain high. Currently, crude glycerin is quoted at US$400-420/ton CIF China in South America, and crude glycerin is mostly quoted at US$420-450/ton CIF China in Southeast Asia. There are high-priced quotes in the market at US$480/ton CIF China. The downstream intention to take over high-priced crude glycerol is low, and the intention to take over is mostly lower than US$400/ton CIF China. Domestic refining plants mostly digest early inventory and have low enthusiasm for purchasing crude glycerin. Some refining plants are concerned about the speed at which the largest crude glycerin-producing country imports crude glycerin into China and the impact of public safety and health incidents in the main crude glycerin-producing countries. The second issue lies in the declining ability of domestic glycerin downstream companies to take over high-priced glycerin, and whether the domestic glycerin market can continue to rise in the future. The intention to take over the domestic refined glycerin plant is around US$400/ton CIF China, and it is difficult to complete the actual transaction.

Downstream demand may be variable. Epichlorohydrin is the main downstream of glycerol, accounting for more than 50% of the downstream demand for glycerol. Judging from the proportion of downstream demand, the glycerin-based epichlorohydrin market has a high degree of dominance in the refined glycerin market. The price of epichlorohydrin has recently climbed to around 10,000 yuan/ton, driven by the rebound in crude oil. Although the price of epichlorohydrin has rebounded, the market point is the start-up situation of an epichlorohydrin factory in Shandong. It is reported that the production capacity of an epichlorohydrin factory in Shandong is about 130,000 tons/year, and the device is a propylene process device. The epichlorohydrin market is still oversupplied. If this device can be turned on, it may put pressure on the price of epichlorohydrin, which may drag down the price of epichlorohydrin. People in the refined glycerin market are worried that the start-up of this device may dampen the enthusiasm for purchasing glycerin-based epichlorohydrin. It is understood that the glycerin-based epichlorohydrin plant usually has glycerin in stock in the early stage, and the stocking will be at least in June. The current purchasing enthusiasm is low, and the superimposed epichlorohydrin unit will be started. The purchasing intention of the glycerin-based epichlorohydrin plant continues to decline.

Downstream demand is weak, and demand may decline in the future. However, as the tight supply of crude glycerol will continue, refined glycerin prices will have good support in the short term. Zhuochuang expects that the price of refined glycerin may remain high and stable in the short term, and the market demand in the later period will be affected.