US chemical profile
than 120 global commodities, visit:
Fatty acids
leela landress profile last published 31 August, 2009
USES
Fatty acids and their chemical derivatives
have a place in almost every phase of mod-
ern living. Fatty acids are largely used in cos-
metics and toiletries such as shampoos, liq-
uid detergents, fabric softeners and body
lotions. They are also used as lubricants and
plasticizers in rubber and polymer process-
ing as they improve the performance of
paints, plastics, lubricants, textiles and rub-
ber products.
Additionally, fatty acids add wanted quali-
ties to foods – mainly to modify other well-
known materials.
SUPPLY/DEMAND
In recent years, global fatty acid demand has
increased as a result of end-use consumption
growth, as well as strong growth of oleochem-
icals (fatty acids, fatty alcohol, glycerine).
Oleic fatty acids have seen increased de-
mand in North America, with the upswing
driven largely by new and broader use of the
C18s in oilfield and drilling applications.
Stronger US demand began to exert its effect
on fundamentals in the latter part of 2012,
draining ready supply of tallow derived
oleics and pulling sharply on C18s from tall
oil feedstock, referred to as TOFAs, or tall oil
fatty acids.
Since most vegetable derived fatty acids
are imported from Asia, local tallow-based
oleic acids are more commonly being used
in these evolving industrial applications.
Demand from US biodiesel producers has
US C18 FATTY ACID PRICES
Cents/lb, contract del
100
90
80
70
60
oleic acid
50
stearic acid triple pressed
stearic acid rubber grade
40
Mar Mar
2013 2014
34 | ICIS Chemical Business | 31 March-6 April 2014
For up-to-date information on more
icis.com/about/price-reports
squeezed supplies of fats and greases in re-
cent years.
However, with uncertainty of the fate of
the US biodiesel industry as the $1/gal fed-
eral tax incentive has expired and
­mandated blending obligations are static,
the ­competition for feedstocks has retreated
to a degree.
In comparison to tallow-based fatty acid
producers, which rely heavily on bleachable
fancy tallow (BFT) as a main feedstock for the
production of acids and certain soaps, bio-
diesel producers can use a variety of fats and
greases including yellow grease and dried
distiller’s grains (DDG).
PRICEs
The tallow-based fatty acid market in the US
remains steady with supply/demand dynam-
ics status quo in recent months. US C18 tal-
low-based triple-pressed stearic acid (TPSA),
C18 stearic rubber grade supply is balanced,
but trending slightly long. C18:1 oleic acid
supply is balanced.
C18 tallow-based TPSA prices were as-
sessed lower on 12 March to 52.50-56.50
cents/lb, as much of the US tallow-based fatty
acids market participates in formula pricing
and BFT averages for the previous month.
Rubber-grade prices in a 46.50-51.50
cent/lb spread were also said to be repre-
sentative for current business while C18:1
oleic fatty acids were at 68.50-72.50 cents/
lb for March business.
Average for Bleachable Fancy
Tallow - Renderer - Chicago
Feb-14 31.7368 cents/lb
Jan-14 32.2750 cents/lb
Dec-13 35.6111 cents/lb
Nov-13 35.1316 cents/lb
Oct-13 33.6522 cents/lb
FEEDSTOCKS
Fatty acids are derived primarily from vege-
table oils such as palm and coconut oil. Most
fatty acid production is in southeast Asia,
particularly Malaysia, Indonesia and the
Philippines. Palm oil is the raw material
used for fatty acid production in Malaysia
and Indonesia, while coconut oil is used in
the Philippines.
US FATTY ACIDS PLANTS*
Company Location
VVF North America Montgomery, Illinois
Emery Oleochemicals Cincinatti, Ohio
PMC Biogenix Memphis, Tennesee
Twin Rivers Technologies Quincy, Massachusetts
Vantage Oleochemicals Chicago, Illinois
P&G Chemicals Cincinatti, Ohio
NOTE:*capacities not available
In North America, fatty acids are pro-
duced primarily from tallow fats. The basic
acids from this production are the C18 stear-
ic acids.
The production process here utilizes
BFT for the main feedstock, which is ren-
dered from cattle and hog material after
slaughter. Glycerine is a co-product of fatty
acid production.
OUTLOOK
The tallow-based fatty acid market in the US
is steady with supply/demand dynamics sta-
ble. However, higher prices in the imported
vegetable-based fatty acids could push the
market higher. Firm palm kernel oil (PKO)
costs in Southeast Asia has added upward
pressure to fatty acid prices in southeast
Asia in recent weeks.
Additionally, the use of oil and fat feed-
stocks instead of petroleum-based feedstocks
to make industrial products such as biofuels
and plastics has created competition for fatty
acids production in recent years. This in turn
has affected pricing, but these applications
are largely dependent on crude oil prices and
whether it will make cost-effective sense to
make the switch.
In 2014, US tallow and other grease prices
are expected to be more available because of
changing feedstock choices available for
multi-feedstock biodiesel production. Lower
biodiesel production rates, paired with other
feedstock options, are expected to take the
pressure off tallow prices in 2014. Increasing
use of dried distiller’s grains (DDG) corn oil
in biodiesel is also relieving pressure on the
supply of tallow. ■
For the latest news on commodity chemicals
including plant shutdowns, company results
and price settlements, visit icis.com/news
www.icis.com