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Prices for European category 3 animal fats moved in an uptrend during the week ending June 25, mainly amid seasonality despite weaker buying interest reported by sources.
Higher temperatures push free fatty acid (FFA) content higher, requiring more higher-grade material to be blended in to achieve 5-15% FFA levels required in the biofuel, oleochemical, feed and pet food industries.
Despite seasonality, prices for category 1 and 2 animal by-products continued to move up amid lower cargo availability, sources said.
Depending on the FFA content of 20-45%, sources quoted category 1 and 2 mixed animal fat at €915-1,000 (1,040-1,137) per tonne in the North-West European market.
“We are seeing slightly better demand for fatty acid methyl ester (FAME), but high feedstock prices squeeze production margins, which are practically non-existent at the moment,” a source told Fastmarkets.
European sources reported weaker animal fats buying interest for exports to the US, while some used cooking oil (UCO) was said to be trading for shipments to the US, but no price levels were confirmed at the time of publication.
Demand for UCO remained moderate in Europe during the reported period, with bids for local material ranging between €1,140-1,155 per tonne in the DDP North-West European market.
Trading for higher-than-average-quality material was reported as high as €1,200-1,210 per tonne DDP, but sources said it was an exceptional trade for a small volume rather than the market as a whole.
High local demand for UCO in Asia kept export prices high, with bulk shipments offered around $1,350-1,360 per tonne for delivery in the CIF Amsterdam, Rotterdam, Antwerp (ARA) market, while deals for container shipments were reported in the range of $1,200-1,220 per tonne during the reported period.
There was more activity reported in the advanced feedstocks market this week, with soapstock acid oil (SSAO) trading around $1,080-1,090 per tonne CIF ARA for shipment from South America, with further offers ranging between $1,050-1,100 per tonne depending on the quality specification.
Sources reported SSAO supply increases in Brazil, but some local animal feed producers were said to be paying higher prices than the export market in Europe.
“It is a seasonal thing, sometimes local buyers pay more and it is less headache to sell internally, so producers don’t even look at the export market,” a source said.
Some indications for food waste oil (FWO) were reported around $1,365-1,385 per tonne CIF ARA on the selling side, versus bids around $1,325-1,335 per tonne, broadly in line with last week’s indications.
On the other side, trading activity remained limited for crude palm oil mill effluent (POME), with market participants pointing to slow demand in the European market.
However, buying interest for refined POME on a CIF ARA basis was quoted around $1,400 per tonne against offers indicated at $1,440 per tonne, while crude POME offers remained stable around $1,350-1,360 per tonne CIF ARA.
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