UCOME biofuel prices in Singapore and Rotterdam declined due to increased Chinese exports and stable POME prices. EU tariffs on Chinese biodiesel imports are pushing more UCOME to Singapore, reports engine online.
Singapore
Singapore’s B24-VLSFO and B24-LSMGO UCOME prices have come down slightly in the past week, both declining by $4/mt. PRIMA assessed the UCOME FOB China benchmark at $970/mt on Friday, down by $10/mt on the week. This has added downward pressure on UCOME-based biofuel prices in Singapore as China is a key exporter of finished biofuel and bio feedstock.
More Chinese UCOME are expected to flow into Singapore as the EU tariffs on Chinese biodiesel imports came into force on 16 August, Will Wong, business development manager at Liaoning Tongde Environmental Protection Technology told ENGINE.
Currently, B24 blends sold in China are not VAT exempted, like VLSFO. This has restricted domestic B24 sales to ocean-going vessels.
Rotterdam
Rotterdam’s B30-VLSFO HBE and B30-LSMGO HBE prices have declined by $8–9/mt in the past week. The two benchmarks have declined despite the Palm Oil Mill Effluent Methyl Ester (POMEME) benchmark holding steady in the past week in the ARA. PRIMA assessed the POMEME price in the ARA at $1,331/mt on Friday, unchanged on the week.
POME is a by-product generated during palm oil production that can be further processed into POMEME by biodiesel refineries.
Faris Razanah Zharfan thinks that Indonesian biodiesel refineries have the potential to process POME into POMEME, but high capex investments required to upgrade these facilities have been holding back these businesses from making these changes. “POME has higher free fatty acids (FFA) and impurities compared to crude palm oil (CPO), so capex to build additional facilities needs to be carefully thought” Zharfan told ENGINE.
Rotterdam’s B30-VLSFO UCOME and B30-LSMGO UCOME have declined by $6–8/mt in the past week amid a $26/mt drop in the PRIMA Markets’ underlying UCOME FOB ARA benchmark. Rotterdam’s B30-VLSFO UCOME is priced about $76/mt higher than Rotterdam’s B30-VLSFO HBE as UCOME-blends don’t qualify for Dutch rebates.
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Source: Engine.online
