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Global Glycerin Market Sending Mixed Signals

August, 2023

By: Peter Giannetti, Americas Glycerin Senior Category Account Manager, and Harald Han, Eurasia Glycerin Senior Category Account Manager

What a difference time can make! Compared to the historic volatility in the global glycerin market in 2022, we saw a relatively steady market through the first half of 2023. Let’s consider what has happened and current trends.

Last year was truly a tale of two halves. The market grew increasingly constrained amid strong global demand, soft generation of crude glycerin from the biodiesel industry and congested global supply chains. Supply assurance and reliability became even more vital to glycerin customers everywhere as the global market experienced significant supply constraints.

Overall, demand softened across the second half of 2022 while supply recovered because of biodiesel production rebounding and supply chains easing. Thus, as 2023 began, glycerin inventories were high throughout supply chains, further weakening demand.

Demand appeared to improve in the first quarter of this year. Pharmaceutical applications for glycerin continue to garner strong demand, while use in food and personal care appears balanced, and industrial applications have been slow to recover. We continue to keep eyes on China’s recovery, with recent reports indicating some uptake in demand overall, despite continued sluggishness in glycerin requirements for epichlorohydrin (ECH). We remain cautious regarding the progress of the market in China.

The supply of refined glycerin appears healthy but currently balanced. In the U.S., specifically, biodiesel production has been challenged by the continued growth of renewable diesel. The U.S. Environmental Protection Agency (EPA) recently finalized its biomass-based diesel blending mandates for 2023-2025, and the mandates were below what some had expected.

In Southeast Asia, the glycerin market is preparing for an El Niño weather pattern that climatologists (with The National Oceanic and Atmospheric Administration in the U.S.) have predicted has a greater than 90% likelihood of continuing through fall. El Niños have historically hindered palm oil production in Southeast Asia, impacting the region’s biodiesel and oleochemical production.

Without question, the oleochemicals industry has faced significant challenges from the highly volatile and demanding market cycles over recent years.

Despite pessimistic outlooks for economies across the globe, we’ve seen strong, steadily growing demand across our glycerin business this year. As with any market, the future trajectory of the international glycerin trade remains unconfirmed, but we remain focused on maintaining the supply assurance, quality and service that our customers have come to expect.