Tallow oil prices are expected to remain low in Germany till the end of May, reversing the upward trend seen in the previous month. The decline in prices is mostly due to cooled buying interest by downstream industries, particularly taking into account these industries are well supplied at the moment.

Oleochemicals and personal care, being large consumers of tallow oil, had accumulated enormous quantities. Stock was the most during April when the buyers acted fast to cover up the supplies due to geopolitical tensions and variations in trade policy. With these industries now set to utilize the inventories available, buying activities slowed down significantly leading to a board-wise market correction.

Compounding the downward price pressure is the seasonality. As warmer weather moves into the Northern Hemisphere, demand for tallow oil slows. Tallow oil, which is used frequently in biodiesel, as well as in several other industrial uses, experiences lower usage in spring and summer because of lower heating needs and seasonal adjustments in production activity. This downward tallow oil demand cycle is also contributing to downward price pressure.

The lift in demand in April was supported by a 90-day tariff holiday by the United States. This placed pressure on foreign buyers, especially in the U.S., to hasten tallow oil imports ahead of the resumption of tariffs. This lift in buying was led by the oleochemical and personal care sectors, which are the dependent users of tallow oil as feedstock. However, since suspension is approaching expiry and supply chains are being hardened, purchasing momentum has dried up considerably.

In the wider European economy, broader economic conditions are also shaping sentiment. Eurozone consumers in April lifted inflation expectations, as increased uncertainty due to the sustained nature of global trade tensions placed them under a shadow. That heightened anxiety is making consumers and businesses themselves more risk-averse, leading to more restrained demand expectations for key commodities such as tallow oil.

The combination of high stocks, weakening seasonal demand, and inflation-driven conservatism has set the tone in the bearish tallow oil market. Both buyers and sellers anticipate a price correction soon as the market settles into post-surge levels. Buyers are largely waiting for new orders to expect further price drops.

According to ChemAnalyst, market participants will continue to closely monitor geopolitical developments, especially any updates related to trade tariffs, which could again shift procurement strategies and impact global pricing. However, in the short term, the consensus points to a continued easing of tallow oil prices.