U.S. Tall Oil prices are set to rise further in August, driven by strong export demand, precautionary Asian buying ahead of tariff changes, and tighter domestic supply. July’s surge in overseas procurement strained logistics, lifted costs, and tightened spot liquidity, fueling price gains. Steady domestic demand, restocking, and SAF sector growth reinforced bullish momentum. Prices are expected to remain firm into autumn and continue an upward trajectory into 2025, despite potential regulatory and cost-related headwinds.
Tall Oil prices in the United States are set to rise further by the end of August, following the strong upswing established in July. Strong export demand, pre-tariff international purchase ahead of uncertainty, and lower domestic availability drove the market in a bullish direction, despite broader economic softness at home.
In July, exports to international markets surged, as U.S. Tall Oil tonnage exports recorded its highest in over a year. Indian and Chinese buyers led the advance, bringing forward purchases to lock in supply before imminent tariff changes and increased third-quarter logistics costs. This surge of front-loading procurement wiped up available U.S. stock, sucked out spot market availability, and drove Tall Oil prices higher.
The surge in outbound flows also created a ripple effect across U.S. logistics networks. Inventory turnover at bulk terminals quickened, inland freight availability tightened, and vessel loading schedules became increasingly congested. With higher costs tied to freight, handling, and storage filtering through the supply chain, suppliers moved to pass these expenses along to buyers. As a result, Tall Oil values in July climbed steadily, setting the stage for continued increases in August.
Domestically, Tall Oil and its products continued to witness robust demand. Tall Oil Fatty Acids (TOFA) maintained steady demand from biodiesel blenders and specialty chemicals producers while distributors and downstream converters availed the chance to restock before the third quarter. Of note, the growth U.S. sustainable aviation fuel (SAF) industry, which has accelerated in 2025, has also indirectly benefited sentiment within applicable bio-based feedstocks, resulting in expectations of good long-term demand for Tall Oil derivatives.
This simultaneous domestic restocking, alongside heavy export flows, intensified competition for limited supply and reinforced price strength. The alignment of international and domestic demand has given sellers greater pricing leverage, even as the U.S. manufacturing sector shows signs of contraction. Reduced supply visibility and concentrated purchasing have tightened market balance, laying the groundwork for sustained price increases through August.
Looking forward, market players envision pressure on Tall Oil to continue rising. Export business is robust, with Asian consumers paying in advance for orders prior to potential tariff readjustment. U.S. sellers, however, are holding firm offering strategies in place to keep values in step with rising logistics costs.
Given these dynamics, Tall Oil prices are anticipated to end August on a stronger footing, marking another step upward in a firming market as it moves into the autumn quarter. The move higher likely to be maintained into 2025, with the market for Crude Tall Oil Derivatives poised to continue developing, but threatened by possible headwinds in the guise of unstable raw material costs, increased regulatory scrutiny, and heightened availability of alternative chemicals.
