Global Tallow Oil Prices Set to Surge in February Amidst Positive Consumer Sentiments

There is a probable uptick in Tallow Oil prices in the global market until the end of February 2024, spurred by increasing demand from pharmaceuticals, cosmetics, and aviation sectors, coupled with dwindling stock levels. Additionally, the expanding use of Tallow Oil in the biofuel sector may further bolster this upward trend. Consequently, market participants are expected to focus on building up inventories in anticipation of surging demand, exacerbating supply constraints, and pushing Tallow Oil prices higher.

After showing strong growth in January, the Indian economy kept its momentum going into February, experiencing accelerated expansion in both the manufacturing and services sectors. The driving forces behind this growth include buoyant demand conditions, improved efficiency, an expanded customer base, and positive sales trends. With favourable market dynamics and increased consumer spending, industries dependent on Tallow Oil, including manufacturing, cosmetics, and biofuels, are likely to witness advantageous conditions, potentially resulting in a price increase. The analogous path for Tallow Oil is anticipated to unfold in the USA and European markets.

In recent developments, Airbus has made a notable appearance at the Singapore Airshow, showcasing its newest A350-1000 widebody aircraft, incorporating a sustainable approach by utilizing a 35% blend of eco-friendly aviation fuel provided by Shell Aviation. This fuel meets the rigorous standards set by the European Union’s International Sustainability and Carbon Certification, derived from the HEFA-SPK pathway utilizing recycled cooking oil and tallow as feedstock. Airbus asserts that sustainable aviation fuel (SAF) typically reduces carbon dioxide (CO2) emissions by 80% compared to conventional jet fuel, a significant contribution to the aviation industry's efforts in decarbonization. As the industry increasingly embraces greener alternatives, the demand for feedstock such as Tallow Oil, integral to SAF production, likely to surge, which may drive up prices in Europe as suppliers strive to fulfill the sustainability objectives of the aviation sector.

The US economy has started 2024 on a positive note, showing promising signs in areas like business activity, employment, public sentiment, and inflation. Consumer confidence saw a third consecutive monthly increase in February, indicating a growing belief in the economy's future and inflation trajectory. This positive sentiment hints at a potential uptick in consumer spending and demand, which is likely to push up prices for Tallow Oil. Additionally, data from the United States Department of Agriculture (USDA) reveals a significant decline in cattle slaughter rates, impacting the availability of tallow, which is derived from animal fats, potentially resulting in an upward pressure on Tallow Oil prices.

According to ChemAnalyst analysis, the prices of Tallow Oil are projected to experience a further increase in the upcoming months. This is attributed to the sustained growth in demand from end-user industries, ongoing geopolitical tensions, and decreasing inventories within the market. These factors collectively indicate a tightening of the Tallow Oil market, creating conditions conducive to a continued upward trajectory in prices.