- Singapore sees declines in UCOME prices amid weaker VLSFO values.
- EU duties on Chinese biodiesel could shift trade dynamics.
- Rotterdam’s biofuel prices drop with limited impact from EU tariff news.
Singapore’s B24-VLSFO UCOME price has declined by $7/mt in the past week, while its B24-LSMGO UCOME price has fallen by $9/mt. These declines follow drops in the values for pure VLSFO ($4/mt) and LSMGO ($9/mt), reports Engine.
Biofuel Bunker Snapshot
The UCOME FOB China benchmark was assessed at $990/mt on Friday by PRIMA Markets, unchanged from the previous week.
On Friday, the European Commission announced provisional duties of up to 36.4% on biodiesel imports from China. PRIMA noted that “the EU anti-dumping results and its associated duties (ADDs) have effectively killed off Chinese biodiesel trading prospects into Europe.”
A lack of EU demand for Chinese biodiesel might result in more Chinese UCOME being exported to meet demand in countries like Singapore, according to sources. However, it is unlikely that Chinese UCOME exported to Singapore could be re-exported into the EU, according to Faris Razanah Zharfan, founder of the Indonesian waste-based biofuel firm Beli Jelantah. Zharfan highlighted that Singaporean biodiesel exporters must disclose information about biofuel feedstocks’ origin countries and refineries, complicating efforts to obscure a biodiesel’s Chinese origin.
Spot bio-bunker demand remains low in Singapore. B24-VLSFO UCOME prices of $726-765/mt were quoted last week, unchanged from the week before. Singapore’s B24-VLSFO price premium over pure VLSFO has narrowed by $3/mt on the week to $117/mt.
In Malaysia’s Port Klang, physical bunker supplier Armada Meridian recently bunkered a vessel with a B24-VLSFO blend. Some suppliers offer prompt B24-VLSFO deliveries, while others require lead times of 10–15 days. B24-VLSFO UCOME can be secured in Port Klang, but its price is typically much higher compared to Singapore’s B24-VLSFO UCOME.
In Rotterdam, the B30-VLSFO HBE price has declined by $8/mt over the past week, and the B30-LSMGO HBE price has dropped by $14/mt. A $32/mt drop in palm oil mill effluent methyl ester (POMEME) prices has pulled both benchmarks lower.
Unlike UCOME, POMEME-based biofuel bunker blends qualify for Dutch HBE credits, which hold value for bunker suppliers and can translate into price rebates for buyers. This makes POMEME a popular feedstock for biofuel bunker blending. PRIMA has assessed HBE A tickets for 2024 at €8.00/GJ ($8.71/GJ), down by €0.35/GJ ($0.38/GJ) on the week. This translates to a theoretical $77/mt rebate for B30 HBE blends sold in the Netherlands, about $4/mt less than a week ago.
Biofuel price premiums over pure conventional fuels in Rotterdam are $189/mt for B30-VLSFO HBE blends and $136/mt for B30-LSMGO HBE blends. These premiums have narrowed by $9-12/mt in the past week.
The EU’s provisional duties on Chinese biodiesel imports could tighten the availability of feedstocks for bio-bunker blending across Europe. Zharfan indicated that biodiesel and HVO refineries in the EU will likely seek non-Chinese UCOs from countries like Malaysia, Indonesia, and the Middle East.
The ARA price for B30-VLSFO UCOME has declined in line with the B30-VLSFO HBE price in Rotterdam over the past week. This has resulted in the UCOME blend remaining unattractive, priced at a $71/mt premium over the rebated HBE price.
The PRIMA-assessed UCOME FOB price in the ARA has declined by $18/mt over the past week, to $1,363/mt. The EU tariff announcement on Chinese biodiesel imports had limited to no upward impact on the UCOME ARA FOB benchmark, as some market participants had already anticipated the possibility of EU tariffs and factored them into prices, according to PRIMA.
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Source: Engine
