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European marine biodiesel prices converge

  • Märkte: Biofuels, Oil products
  • 01.12.23

Marine biodiesel blend price spreads converged along regional lines in November, as traded values eased in the west Mediterranean but held ground in northwest European ports.

The price of B24, a blend comprising 76pc very-low sulphur fuel oil (VLSFO) and 24pc used cooking oil methyl ester (Ucome), fell to $775.67/t, dob Algeciras-Gibraltar, on 15-30 November from $783.68/t in the two weeks prior.

The price slipped on the back of thinning trading activity as a consequence of limited marine biodiesel bunkering demand in the region, according to market participants. And unbalanced upstream fundamentals on the VLSFO and Ucome markets weighed on market fundamentals for the B24 blend.

Easing prices for marine biodiesel in the Mediterranean were not mirrored in northwest Europe. Argus assessed B30 (Ucome) fob ARA, which combines the European benchmark biodiesel assessment and fob VLSFO barge prices, at an average of $764.32/t in the second half of November — higher by $4.54/t from the average in 1-14 November.

Market participants reported firmer demand in Antwerp for the B30 (Ucome) fob ARA blend, ahead of introduction of the EU emissions trading system (ETS) regulations.

Argus assessed Ucome fob ARA range barges at an average of $1,262.25/t in the second half of November, higher by nearly $40.50/t than the average on 1-14 November as market participants held onto storage with an eye on a contango structure into 2024. As a consequence, the premium commanded by B24 dob Algeciras-Gibraltar to B30 (Ucome) fob ARA narrowed to $11.34/t (or 1.5pc) from $23.90/t (or 3.16pc) in the same timeframe.

The price convergence translated more prominently on the advanced biodiesel marine blend. The B30 advanced fatty acid methyl ester (Fame) 0°C CFPP dob ARA price — which incorporates a significant price deduction for advanced Dutch renewable fuel (HBE-G) tickets, which are available for those domestically blending biofuels produced from feedstocks listed in Annex IX Part A of the EU's Renewable Energy Directive (RED II) — rose to an average of $671.56/t in the second half of the month, from $660.68/t on 1-14 November.

Market participants said uncertainty was a factor lending measured support to prices in recent weeks, eventually settled by the decision by the Dutch government to reduce the multiplier for biofuels in maritime shipping to 0.4 from 2024. Those in the market have sought to take advantage of the current multiplier of 0.8 before the year ends. B30 advanced Fame dob ARA prices should rise further in 2024 regardless of demand for the blend components, based on a lesser reduction in the HBE-G value that is deducted from the total.

Argus assessed B24 dob Algeciras-Gibraltar at a premium of $104.10/t (or 15.51pc) to the B30 advanced Fame dob ARA on 15-30 November, narrowing from the $123/t (or 18.66pc) premium held in the two weeks prior.


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