Singapore Becomes Top Destination For Chinese UCOs

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  • Singapore’s UCO imports from China rose in April
  • UCOME and POMEME prices rise in the ARA
  • Singapore’s B24 drops to rare discount to Rotterdam’s B30

Singapore becomes top destination for Chinese UCOs, reports Engine.

Singapore

Singapore’s B24-LSMGO and B24-VLSFO prices have declined by $18-27/mt in the past week. The prices have come under pressure amid a $10/mt drop in UCOME FOB China, according to PRIMA Markets. Chinese biodiesel exports to the EU are being investigated by the European Commission for “unfairly traded biodiesel”. The ongoing investigation has dented Chinese biodiesel inflows into European countries.

Singapore’s B24-VLSFO price has dropped by $27/mt in the past week, while Rotterdam’s B30-VLSFO HBE has gained by $11/mt. This has flipped Singapore’s B24-VLSFO premium of $12/mt over Rotterdam’s B30-VLSFO HBE to a rare $26/mt discount. 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.

Biofuel price premiums over pure conventional fuels are $99/mt for B24-VLSFO blend and $70/mt for B24-LSMGO. These premiums have widened by $2-5/mt in the past week.

China exported about 212,000 mt of used cooking oil (UCO) in April, with Singapore importing a major chunk of 66,000 mt, Quantum Commodity Intelligence reported citing Chinese customs data.

Some of the UCOs imported by Singapore were likely used for sustainable aviation fuel (SAF) production, Indonesian waste-based biofuel firm Beli Jelantah’s founder Faris Razanah Zharfan told ENGINE. Demand for SAF has been picking up, partly due to commitments from airlines, Zharfan added.

Neste’s SAF refinery in Singapore, typically relies on UCO as a primary feedstock for SAF production.

Rotterdam

Rotterdam’s B30-VLSFO and B30-LSMGO HBE prices have gained by $11-19/mt over the past week, supported by a big gain in the price of palm oil mill effluent methyl ester (POMEME).

PRIMA-assessed POMEME price in the ARA has jumped by $70/mt to $1,368/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 $163/mt for B30-VLSFO HBE blend and $110/mt for B30-LSMGO HBE blend. These premiums have widened by $26-29/mt in the past week.

The 2024 ticket price for advanced HBE has come down from €8.75/GJ ($9.49/GJ) to €8.50/GJ ($9.22/GJ) and resulted in a $3/mt lower rebate for B30 blends sold in the Netherlands. The rebate is around $82/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-VLSFO and B30-LSMGO UCOME prices have increased by $8-16/mt amid a $70/mt rise in PRIMA Markets’ underlying UCOME FOB ARA benchmark. PRIMA says UCOME price has risen “in line with the upward trend seen across the rest of the biodiesel complex.”

B24-VLSFO UCOME has been indicated about $10/mt lower in Gibraltar than B30-VLSFO UCOME has been indicated at in Rotterdam.

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

  • Singapore’s B24-VLSFO UCOME down by $27/mt to $690/mt
  • Singapore’s B24-LSMGO UCOME down by $18/mt to $782/mt
  • Rotterdam’s B30-VLSFO HBE up by $11/mt to $716/mt
  • Rotterdam’s B30-LSMGO HBE up by $19/mt to $841/mt
  • Rotterdam’s B30-VLSFO UCOME up by $8/mt at $787/mt
  • Rotterdam’s B30-LSMGO UCOME up by $16/mt to $912/mt

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Source: Engine