Chinese Biodiesel Demand From Europe Remains Low

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  • Singapore’s B24 discount to Rotterdam’s B30 narrows.
  • Demand for bio-bunkers remains low in Rotterdam and Gibraltar.
  • Uncertainty remains around anti-dumping duties on imports from China.

Chinese biodiesel demand from Europe remains low, reports Engine.

Singapore

Singapore’s B24-LSMGO and B24-VLSFO prices have increased by $16-19/mt. The bio-bunker prices have gained despite a $5/mt drop in UCOME FOB China benchmark, according to PRIMA Markets.

Unlike Singapore, bio-bunker prices in Rotterdam declined in the past week. As a result, Singapore’s B24-VLSFO discount to Rotterdam’s B30-VLSFO HBE has narrowed significantly from $45/mt to $12/mt in the past 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.

PRIMA says Chinese biodiesel buying interest from European buyers remains low due to EU import duty risks. Some biodiesel producers in China are even reducing production amid the ongoing investigations.

The European Biodiesel Board (EBB) stated that “the EU biodiesel industry may not survive 2024 if left unprotected from Chinese unfair imports.” The European biodiesel association has requested the European Commission to implement immediate registration of imports from China until the provisional import duties are levied.

Some argue that Chinese UCO may flow into Singapore due to EU duties on Chinese biodiesel imports. This could add downward pressure on bio-bunker prices in Singapore.

Demand for biofuel blends was mostly limited in Singapore last week, two sources say. Availability has been normal in the port, with recommended lead times of at least 10 days to ensure full coverage from suppliers.

Biofuel price premiums over pure conventional fuels are $117/mt for B24-VLSFO blend and $88/mt for B24-LSMGO. These premiums have widened by $17-18/mt in the past week.

Rotterdam

Rotterdam B30-VLSFO and B30-LSMGO HBE prices have come down sharply, both declining $14/mt on the week. A steep decline in the price of palm oil mill effluent methyl ester (POMEME) has pulled both benchmarks lower.

PRIMA-assessed POMEME price in the ARA has plunged by $60/mt to $1,358/mt in the past week. 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.

Biofuel price premiums over pure conventional fuels are $181/mt for B30-VLSFO HBE blend and $126/mt for B30-LSMGO HBE blend. These premiums have remained steady on the week.

The 2024 ticket price for advanced HBE has increased from €8.35/GJ ($8.99/GJ) to €9.00/GJ ($9.69/GJ) and resulted in a $7/mt higher rebate for B30 blends sold in the Netherlands. The rebate is around $87/mt and makes it still lucrative to bunker advanced biofuel blends in Dutch ports compared to ports in Belgium and other countries where discounts don’t exist.

Rotterdam’s B30-LSMGO and B30-VLSFO UCOME prices have also come down, dropping by $7-8/mt in the past week. Decline in the underlying UCOME FOB ARA benchmark has pulled bio-bunker prices lower. PRIMA-assessed UCOME FOB ARA price has plunged by $60/mt to $1,323/mt in the past week.

PRIMA says that “the biodiesel complex in Europe in general has reacted relatively poorly to the news that the anti-dumping duties on imports from China would not be applied before June or maybe even before July”.

Overall, demand for biofuel blends has been low in the ARA and in Gibraltar, two sources say. B24-VLSFO UCOME was indicated at $762/mt in Gibraltar and Algeciras on Friday, almost unchanged from last week.

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

  • Singapore’s B24-VLSFO UCOME up by $19/mt to $705/mt
  • Singapore’s B24-LSMGO UCOME up by $16/mt to $797/mt
  • Rotterdam’s B30-VLSFO HBE down by $14/mt to $717/mt
  • Rotterdam’s B30-LSMGO HBE down by $14/mt to $843/mt
  • Rotterdam’s B30-VLSFO UCOME down by $8/mt at $793/mt
  • Rotterdam’s B30-LSMGO UCOME down by $7/mt to $920/mt

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Source: Engine

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