"In the last year, spot glycerin pricing has been all over the map," says David Grande, president of Vitusa Products, a glycerin reseller based in Berkeley Heights, N.J. "But the general trend has been price erosion through the summer, and pricing seems to have stabilized in the last couple of months."

Rich Gochee, product manager for fatty acids and glycerin at Uniqema agrees, adding that "the market has bottomed out and we expect prices to be stable to higher in 2002."

Producers believe that the glycerin market is at a turning point and are expecting price increases of 5¢-10¢/lb during fourth quarter 2001. In fact, Dow Chemical Co., Midland, Mich., has already announced a price increase of 5¢/lb for its synthetic and USP material, effective Nov. 1.

But while most buyers agree the pricing trend is on its way up, the general consensus is that market conditions support a more modest gain. According to buyers responding to Purchasing's monthly survey of chemical transaction prices, glycerin tags began eroding from an average of about 76¢/lb in third quarter of last year to an average of about 72¢/lb for much of third quarter 2001. Buyers expect to see pricing increase to 75¢/lb in the short term and stabilize through much of first half 2002. From there, buyers expect prices to rise to an average of about 80¢/lb by this time next year.

According to producers, inventory is the biggest factor that is influencing the price trend right now in the U.S. Producers report that glycerin inventory levels are very low while domestic demand remains strong. This has put upward price pressure on imports from European and Asian producers.

While demand for most chemicals remains in decline with the overall economy, "demand for glycerin is still brisk," says Vitusa's Grande.

"Consumer spending patterns are changing," says Uniqema's Gochee. "Consumers can't afford many upscale, high-priced products, so they're turning to upscale lower priced products," he says. "This tends to be good for consumer products markets, including personal care items, foods, and pharmaceuticals, which use the most glycerin," he says.

Demand for glycerin is relatively stable, growing at an annual rate of 3%-4%. Annual consumption of glycerin usually runs at about 530 million lb/yr. However, the downturn in the U.S. economy has caused shipments to dip below 500 million lb.

Uniqema's Gochee says supply is fairly balanced with demand at present. "In the last few months, supplies have decreased by roughly 25%, but this condition will need to persist for another few months before the glycerin market will become 'short'," he says.

Glycerin is used in a wide variety of applications, including the manufacture of cosmetics, pharmaceuticals, toiletries and personal care products. These applications make up more than 40% of demand in the U.S. As an emollient, glycerin is used in suntan lotions, various beauty and skin lotions, and toothpaste. In pharmaceuticals , glycerin is a primary ingredient in manufacture of gel caps and other forms of pharmaceuticals packaging.

Glycerin is also used in food and beverages, primarily as a humectant to seal in moisture for baked goods and other prepared foods. Other end markets include tobacco, urethane products, other plastic resins, and explosives.