As the Year Wraps Up, Tallow Oil Prices are Anticipated to Climb Once More in December
As the Year Wraps Up, Tallow Oil Prices are Anticipated to Climb Once More in December

As the Year Wraps Up, Tallow Oil Prices are Anticipated to Climb Once More in December

  • 19-Dec-2023 4:39 PM
  • Journalist: Shiba Teramoto

The prices of Tallow oil are poised to rise in the USA and Germany in December, continuing a previous upward trend. This rise is mainly attributed to growing demand from end-user industries that will likely surpass the market supply. Derivatives of Tallow oil, functioning as emollients and moisturizing agents, are used in cosmetics and personal care products such as lotions and creams. The month of December typically witnesses heightened interest in Tallow oil, particularly for winter applications due to colder weather conditions, potentially exerting additional pressure on prices.

In December, consumer confidence in Germany experienced a moderate boost, with an easing of inflation, despite a subdued economic climate. The latest data from the German Federal Statistical Office Destatis indicates a decrease in inflation to 3.2% year-on-year from 3.8% YoY in October, marking the lowest level since June 2021. This decline is attributed to a reduction in energy prices, which potentially stimulates market demand and, subsequently, contributes to an increase in Tallow oil prices. Moreover, the recent survey highlights an improvement in German consumers' inclination to make purchases just ahead of the holiday shopping season, although an overall sense of uncertainty persists among consumers about the future. This positive consumer data serves as a noteworthy development for Germany, especially following recent data indicating a contraction in the economy.

The USA market is anticipated to mimic the similar price trajectory for Tallow oil. In mid-December, sentiment among U.S. consumers experienced a notable improvement, marking a reversal from months of declining confidence. This positive shift is attributed to easing inflation, instilling a brighter outlook regarding the economic future. Consumers express confidence in a more rapid decline in inflation, projecting it to be 3.1% for the upcoming year compared to the previous expectation of 4.5%. Tallow oil, traditionally utilized in candle making alongside other ingredients, has historical significance in this craft. Candles, renowned for their warm glow and contribution to a cozy atmosphere, are popular decorations and gifts during the Christmas season. As the holiday season approaches, the demand for candles typically rises, potentially exerting pressure on Tallow oil prices in December. In anticipation of the predicted increase in demand, market participants could strategically raise prices to capitalize on profit opportunities, thereby positively influencing overall market sentiments.

According to ChemAnalyst's analysis, the demand for Tallow oil could endure into the beginning of the new fiscal year, possibly resulting in price hikes. Also, the expected further moderation in inflation could serve as an additional incentive for consumers to engage in buying activities, thereby potentially boosting the demand for Tallow oil. Apart from that, the potential depletion of Tallow oil stocks in the USA and European markets after the holiday season could cause temporary shortages and price adjustments until new supplies become accessible.

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