Global Glycerine Prices Surge in August 2023 Amidst Surging Raw Material Costs
- 08-Sep-2023 5:08 PM
- Journalist: Emilia Jackson
August 2023 witnessed a significant and simultaneous increase in the prices of refined Glycerine and crude oil globally, sending shockwaves through various industries and economies. This unexpected surge has raised concerns and questions about the underlying factors driving this price escalation.
One of the primary factors contributing to the increase in both refined Glycerine and crude oil prices is supply chain disruptions. These disruptions have impacted the production and distribution of refined Glycerine and crude oil, reducing availability and higher costs. Geopolitical tensions in key oil-producing regions, such as the Middle East and Eastern Europe, have significantly increased the Glycerine price. These tensions have led to concerns about potential supply disruptions, prompting market speculations and driving up crude oil prices. As refined Glycerine is often a byproduct of the crude oil refining process, its prices are closely tied to crude oil fluctuations.
Many countries have intensified their efforts to transition to cleaner and renewable energy sources, which has led to increased investments in biofuels and other alternative energy technologies. Refined Glycerine, a key component in biofuel production, has witnessed heightened demand, further driving its prices.
Furthermore, the rising prices of competing oils, coupled with production issues in the U.S. and supply disruptions in the Black Sea region, have led to an increased demand for palm oil as a raw material, influencing Glycerine prices. This heightened demand is anticipated to help Indonesia and Malaysia reduce their palm oil stockpiles while strengthening the Malaysian palm oil futures market.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) play a crucial role in determining global crude oil prices through production quotas. Any decision to increase or decrease production levels can significantly impact crude oil prices and other commodities, including Glycerine. In August 2023, OPEC+ members decided to maintain production levels, which, combined with other factors, pushed crude oil prices higher. It is anticipated that China's crude oil imports from Saudi Arabia will continue to experience a subdued performance throughout the third quarter of 2023. China is currently tapping into its extensive stockpiles, which were strategically accumulated earlier this year, as a response to a reduction in procurement by refiners. This reduction in purchases occurred in the wake of oil prices exceeding $80 per barrel, primarily due to supply curtailments enforced by the OPEC+ coalition, consisting of the Organization of the Petroleum Exporting Countries (OPEC) and its allied partner, Russia.