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Global Glycerin Market Update

January, 2021

By: Julio Dominguez, Sales Category Director - Americas and Candy Lim, Asia Glycerin Product Manager

It has been a rollercoaster year for the Glycerin market since the beginning of 2020. In the first quarter, Glycerin availability appeared to be sufficient to meet demand supported by biodiesel production. As we stepped into the second quarter, the spread of COVID-19 around the world led to multiple lockdowns and supply outages during a time of surging Glycerin demand in cleaning and sanitization, as well as food and pharma applications.

With the gradual easing of lockdowns, Glycerin supply appears to be recovering. However, the price differential between petroleum and natural feedstock oils impacts the economic feasibility of government Biodiesel mandates. Reduced fuel demand is keeping petroleum prices lower for longer while biodiesel feedstock costs are higher or less available as in the case of soybean oil. As evidence, Brazil lowered its Biodiesel blenders mandate from 12% to 10%, Argentina’s Biodiesel production is lower, Indonesia plans to supplement its B40 mandate with 10% renewable diesel. In the USA, over 90 small refinery exemptions (SRE) have been requested for wavers to the Renewable Fuel Standard. Any of these factors may curb co-product Glycerin generation, thereby reducing supply.

Glycerin demand is picking up at a varying pace dependent on application. Demand for Glycerin in staple formulations (food, pharma, cleaning and sanitization) remains strongly supported by changes in consumer habits. China’s demand for oleochemical products remains critical for market segment recovery, and we are already seeing an uptick in the segments having the highest quality appeal. With changes in both supply and demand dynamics, the market is expected to adjust in re-establishing the new equilibrium.