Biofuel Bunker Snapshot: Less Demand In Rotterdam

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  • Chinese UCOME prices continue to trend lower.
  • Singapore’s B24 VLSFO discount to B24-LSMGO narrows.
  • Low bio-bunker demand in the ARA.

Total sales of fossil bunker fuels and marine biodiesel blends at the port of Rotterdam were 2.45mn t in the first quarter this year, up by 13pc compared with the final three months of 2023 but 9pc lower year on year, according to Engine.

Singapore

Singapore’s B24-VLSFO UCOME price has inched $5/mt higher in the past week, while its B24-LSMGO UCOME price has shed $11/mt. The price moves have narrowed the B24-LSMGO premium over B24-VLSFO from $105/mt last week to $89/mt.

Some claim that bio-bunker demand has slightly improved in Singapore, with one supplier noting that some demand has shifted from Rotterdam to Singapore. Improved demand could explain why prices of the most-sought-after biofuel blend, B24-VLSFO, have gained some in the past week.

Singapore sold 66,000 mt of bio-bunkers in March – the highest since last November. The premium of B24-VLSFO over pure VLSFO is about $94/mt, while the premium of B24-LSMGO over pure LSMGO is $65/mt.

Singapore’s B24-LSMGO UCOME price drop has been greater than that of Rotterdam’s B30-LSMGO UCOME. The price moves have widened Singapore’s B24-LSMGO discount to Rotterdam’s B30-LSMGO by $6/mt to $78/mt over the week. These are, of course, different blend ratios, but they represent the lowest-priced typical biofuel blends in the world’s two biggest bunker ports for comparison.

Chinese UCOME FOB prices have come down by $5/mt in the past week to $1,020/mt, according to PRIMA Markets. Weaker demand because of the ongoing EU’s anti-dumping investigation has added downward pressure on the benchmark.

Singapore’s B24-VLSFO price was trading around $35/mt lower than Hong Kong’s B24-VLSFO last Friday. Availability is good in Hong Kong, while B24-VLSFO is almost out of stock in China’s Zhoushan, a source says. Some can offer B24-VLSFO based on firm enquiries, but these offers are very hard to secure and require longer lead times.

Rotterdam

Rotterdam’s B30-VLSFO HBE price has gained marginally by $7/mt in the past week, while its B30-LSMGO price has remained steady. Biofuel price premiums over pure conventional fuels are $124/mt for B30-VLSFO blend and $81/mt for B30-LSMGO blend.

Bio-bunker prices in Rotterdam have increased despite sluggish demand. A slight increase in palm oil mill effluent methyl ester (POMEME) prices has supported bio-bunker price gains in Rotterdam.

PRIMA-assessed POMEME in the ARA has gone up by $13/mt on the week to $1,293/mt. POMEME is one of the most popular advanced biofuel feedstocks, and POMEME-based biofuels can qualify for advanced biofuel rebates through the Dutch HBE system.

China continues to import palm oil mill effluent (POME) from Indonesia. “So far POME (not POMEME) is being exported more to China compared to Europe (Netherlands / Italy / etc). China processes POME into POMEME then exports it to Europe,” Indonesian waste-based biofuel firm Beli Jelantah’s founder Faris Razanah Zharfan told ENGINE.

Zharfan thinks POME demand from European countries could slow down because of stringent ISCC norms. “From sustainability requirements perspective, since POME is categorized as high-risk feedstock in ISCC these days with higher standard of traceability, demand may cool down,” he added.

It remains to be seen whether European buyers will still prefer POME over other waste-based biofuel feedstocks, Zharfan stated. A potential decrease in POMEME imports, which are derived from POME, could potentially push bio-bunker prices up in Rotterdam.

The 2024 ticket price for advanced Dutch hernieuwbare brandstofeenheden (HBE) has come down from €9.19/GJ ($9.84/GJ) to €8.60/GJ ($9.20/GJ). As a result, the Dutch HBE rebate for B30 blends sold in the Netherlands has come down by $6/mt to $82/mt.

Changes in weekly bio-bunker prices (ENGINE-PRIMA Markets):

  • Singapore’s B24-VLSFO UCOME up by $5/mt to $747/mt
  • Singapore’s B24-LSMGO UCOME down by $11/mt to $836/mt
  • Rotterdam’s B30-VLSFO HBE up by $7/mt to $731/mt
  • Rotterdam’s B30-LSMGO HBE unchanged at $832/mt
  • Rotterdam’s B30-VLSFO UCOME up by $2/mt to $813/mt
  • Rotterdam’s B30-LSMGO UCOME down by $5/mt to $914/mt

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Source: Engine