Brazil 1Q tallow exports triple on long-term contracts

  • Spanish Market: Agriculture, Biofuels, Oil products
  • 22/04/24

Brazilian beef tallow exports totaled 73,930 metric tonnes (t) in the first quarter, a three-fold increase from the same three-month period in 2023 on rising demand.

Almost 93pc of outflows between January and March were shipped to the US, according to data from Brazil's trade ministry.

Long-term contracts explain the rising flow of exports, even though spot market arbitrage was closed throughout the first quarter (see chart). The price of tallow in the Paranagua and Santos ports was $960/t fob on 19 April, keeping the arbitrage closed to US Gulf coast buyers, where the reference product was at $901/t on a delivered inland basis.

Brazilian tallow is also negotiated at a premium against soybean oil, which closed at $882/t fob Paranagua on 19 April. This scenario has been observed since the 1 December 2023 start of Argus' tallow export price assessment.

Historically, vegetable oil in Brazil was traded at a discount to tallow, but strong demand has boosted the price of animal fat. Some biodiesel plants have been purchasing used cooking oil (UCO) or pork fat as an alternative.

In 2023, there were doubts about whether the outflow of tallow from Brazil would be constant. Market participants now believe that the 2024 start of operations at new renewable diesel refineries in the US should sustain exports.

Local suppliers that have already signed supply guarantee contracts — some up to three years — with American buyers are also considering export opportunities with Asia, including a new renewable diesel plant in Singapore that could receive Brazilian cargoes.

Expansion projects are propelling US demand, including work that would bring capacity at Marathon Petroleum's Martinez Renewables plants in California to 2.35mn m³/y (40,750 b/d)and the Phillips 66 Rodeo unit in northern Californiato 3mn m³/y. These and other new projects will increase annual US demand for tallow by 5mn t.

Maintenance on the horizon

Maintenance at US refineries has Brazilian sellers bracing for a short-term drop in prices. Between May and June the Diamond Green Diesel (DGD) unit in Port Arthur, Texas, will shut down for maintenance, a stoppage that could impact demand for Brazilian inputs.

Market participants have already observed a slight increase in domestic tallow supply, a change they attribute to maintenance at DGD.

The advance of the soybean crop in Argentina is also expected to increase the supply of feedstocks to North American plants, as some refineries are returning to soybean oil after a hiatus of several years. The soybean oil quote on the Chicago Board of Trade (CBOT) is an important reference for the price of tallow.

Renewable feedstocks in Brazil on fob basis R/t

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27/05/24

Japan firms study carbon neutral fuels for auto sector

Japan firms study carbon neutral fuels for auto sector

Osaka, 27 May (Argus) — A group of Japanese companies are exploring the possibility of expanding the use of carbon neutral fuels — such as synthetic fuels, or e-fuels, and biofuels — in the country's automobile sector, aiming to cut carbon dioxide (CO2) emissions from internal combustion engine vehicles. Japanese auto manufacturer Toyota, engineering firm Mitsubishi Heavy Industries and refiners Idemitsu and Eneos said on 27 May that they had signed an initial agreement to jointly carry out a feasibility study by discussing scenarios, roadmaps and necessary regulations to introduce the clean fuels around 2030. The partnership assumes domestic production of e-fuels and biofuels to enhance the country's energy security. They plan to produce e-fuels from CO2 and renewable-based hydrogen, while biofuels will be derived from plants and other sources. But potential output capacity is still unclear. It is also unknown how they will buy feedstocks to produce the clean fuels, creating the possibility for imports and domestic purchases. Japan has pledged to ban sales of gasoline-only passenger cars and a shift to electric vehicles (EVs) by 2035, part of its 2050 net zero emissions goal. But EVs also include fuel-cell vehicles, plug-in hybrids and hybrid EVs. This suggests the country will need cleaner fuels to decarbonise engines burned by fossil fuels. Toyota has already introduced in Brazil since 2007 a hybrid, flex-fuel vehicle that can run on biofuels and gasoline. The company will invest 11bn real ($2.1bn) in Brazil over the next six years to decarbonise and electrify its fleet. But it is still unclear how many flex-fuel vehicles it will introduce in Japan, the company said. To help reduce CO2 emissions from the auto sector, Japan's trade and industry ministry already requires domestic refiners to use 500,000 kilolitres/yr (8,616 b/d) of the crude equivalent of ETBE or bioethanol. Brazil is currently the sole bioethanol supplier to Japan with 55,179 bl delivered in February. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Dangote refinery to export 10ppm diesel in June


24/05/24
24/05/24

Dangote refinery to export 10ppm diesel in June

London, 24 May (Argus) — Nigeria's 650,000 b/d Dangote refinery will start exporting diesel conforming to European specifications along with gasoline sales in June, its vice president for oil and gas Devakumar Edwin has said. "We expect before the end of next month we'll also have gasoline in the market, and we'll also have Euro V diesel for export, that is below 10ppm", Edwin said this week at a Society of Petroleum Engineers event in Lagos. Dangote chief executive Aliko Dangote reiterated the planned June start for gasoline on 17 May. Dangote started its crude distillation unit in January, and received approval to start up a mild hydrocracker with its desulphurisation units in March. A source at Nigeria's downstream regulator NMDPRA said the refinery has now received approval to start its residual fluid catalytic cracker. Dangote started naphtha exports in March, low-sulphur straight run fuel oil (LSSR) exports in May and began selling diesel and jet fuel domestically in April. It has a waiver from NMDPRA to sell diesel with sulphur levels above 600ppm into the local market. At full capacity Dangote will be able to more than meet Nigerian domestic gasoline demand. But a trader in the region said gasoline production is unlikely to start next month, citing the amount of cargoes to be delivered to the country. Exports of naphtha, a key blending component in finished-grade gasoline, are continuing from the refinery, with 80,000t due to load on 31 May according to Kpler. And Edwin hinted at a slowing of spot sales. "We had a meeting to see, probably, how we can slow down our sales because we've already made quite a few forward bookings," he said this week. "Export, for example, aviation/jet, the last vessel went to the Caribbean islands. The next vessel, we are booking for US market." Dangote recently added TotalEnergies as a buyer in a deal that could see the French company take refined products for its African network of 4,800 retail fuel stations, including more than 540 in Nigeria. The deal could also see the oil major supply crude to the refinery. A source told Argus there is a deal for TotalEnergies to supply two crude cargoes each month, or around 2mn bl. Indications based on the refinery's slate to date and TotalEnergies' Nigerian crude equity suggest one cargo of the very light Amenam blend one of Bonny Light. By Adebiyi Olusolape and George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Funding grant aims to lift Australia-China barley trade


24/05/24
24/05/24

Funding grant aims to lift Australia-China barley trade

Sydney, 24 May (Argus) — Australia's barley trade with China has the potential to expand further following a government-backed grant to support relationships between Australian growers and Chinese maltsters and brewers. Australia's National Foundation for Australia-China Relations (NFACR) awarded the Australian Export Grains Innovation Centre (AEGIC) A$350,000 ($231,735) to support Australian growers "re-engage and reinvigorate relationships" with Chinese barley importers and promote sustainable barley trade. Australia's barley trade with China has rapidly recovered since Beijing removed its 80.5pc anti-dumping and countervailing duties on Australian barley in August 2023. The tariffs had caused barley exports to China to cease entirely between December 2020 and July 2023 but exports hit a decade high of 1.16mn t in December 2023, according to Australia Bureau of Statistics data. AEGIC will use the NFACR grant to host Australian barley industry seminars in China, as well as to demonstrate the Australian barley supply chain to a Chinese delegation in Australia. AEGIC's provision of technical information on Australian barley to Chinese buyers will increase "the likelihood they will choose grain from Australia", said its executive general manager Courtney Draper on 20 May. China is Australia's largest barley export destination this year, accounting for 82pc of all barley exports during January-March, ABS data show. By Edward Dunlop Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Richmond City Council proposes Chevron refinery tax


23/05/24
23/05/24

Richmond City Council proposes Chevron refinery tax

Houston, 23 May (Argus) — The Richmond City Council in California's Bay Area has paved the way for a tax on Chevron's 245,000 b/d refinery, voting unanimously at a 21 May meeting for the city's attorney to prepare a ballot initiative. The newly proposed excise tax would be based on the Richmond refinery's feedstock throughputs, according to a presentation given by Communities for a Better Environment (CBE) at the meeting. It is a "…legally defensible strategy to generate new revenue for the city," CBE attorney Kerry Guerin said. The city has previously looked to tax the refinery, with voters passing ‘Measure T' in 2008 before it was struck down in court in 2009. This led to a 15-year settlement agreement freezing any new taxes on Chevron's refinery, but the agreement expires on 30 June 2025. The city is projecting a $34mn budget shortfall for the 2024 to 2025 fiscal year and is seeking to shore up its finances with additional revenue. Ballot initiatives allow Californian citizens to bring laws to a vote without the support of the state's governor or legislature, and the tax proposal could go to voters as early as November this year, according to CBE's Guerin. "Richmond has been the refinery town for more than 100 years, but it won't be 100 years from now," Richmond Mayor Eduardo Martinez said during the meeting. Chevron reiterates risk to renewables A tax on the refinery is the "wrong approach to encourage investment in our facility and in the city that could lead to new energy solutions and reductions in emissions from the refinery," Chevron senior public affairs representative Brian Hubinger said during the meeting's public comments. Hubinger's comment echoes prior warnings from Chevron that a potential cap on California refining profit in the process of being implemented by the California Energy Commission (CEC) would make the company less willing to investment in renewable energy . "An additional punitive tax burden reduces our ability to make investments in our facility to provide the affordable, reliable and ever-cleaner energy our community depends on every day, along with the job opportunities and emission reductions that go with these investments," Chevron said in an emailed statement. The Richmond refinery tax is a "hasty proposal, brought forward by activist interests," the company said. The company last year finished converting a hydrotreating unit at its 269,000 b/d El Segundo, California, refinery to process both renewable and crude feedstocks. The facility was processing 2,000 b/d of bio feedstock to produce renewable diesel (RD) and sustainable aviation fuel (SAF) and said it expected to up production to 10,000 b/d last year. But Chevron has so far lagged its California refining peers in terms of RD volumes with Marathon's Martinez plant running at about 24,000 b/d in the first quarter — half of its nameplate capacity — and Phillips 66's Rodeo refinery producing 30,000 b/d with plans to up runs to over 50,000 b/d by the end of the second quarter . Chevron did not immediately respond to a request for current RD volumes at its California refineries. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Günstiger Frei-Haus Diesel wirft Fragen auf


23/05/24
23/05/24

Günstiger Frei-Haus Diesel wirft Fragen auf

Hamburg, 23 May (Argus) — Im Osten und Süden Deutschlands bieten mehrere Unternehmen mindestens seit Ende 2023 Diesel zur Lieferung frei Haus teils mehrere Euro pro 100l unter den Preisen ab Lager oder Raffinerie an. Händler berichten von Umsatzeinbußen. Marktteilnehmer in den entsprechenden Regionen im Osten und Nordbayern suchen nach einer Erklärung für diese großen Preisdifferenzen. Sie berichten von Diesellieferungen frei Haus, deren Preis 4,00 €/100l bis 6,00 €/100l unter den Inlandspreisnotierungen und damit weit unter ihren Einkaufspreisen liegt. Entsprechend könnten sie preislich nicht mithalten. Händler und Großhändler haben deswegen Kunden in geschäftsrelevanten Größenordnungen verloren. Inverkehrbringer von Diesel schätzen, dass täglich etwa zwischen 600 und 1000 m³ von den Niedrigpreisanbietern umgesetzt werden. Weiter geben Marktteilnehmer an, es seien diverse Zollämter auf diese Preisdiskrepanz aufmerksam gemacht und um Überprüfung gebeten worden, ein Ergebnis stehe jedoch noch aus. Die Generalzolldirektion teilte auf Anfrage von Argus mit, zu etwaigen laufenden Ermittlungen keine Auskunft geben zu können. Die Firmen, die Diesel so günstig anbieten, sind erst seit kurzer Zeit aktiv beziehungsweise waren zuvor nicht im Mineralölmarkt tätig. Gegenüber Argus haben zwei der besagten Anbieter bestätigt, dass sie Diesel unter Inlandspreisniveau verkaufen, gaben jedoch keine Auskunft darüber, wer exakt die Ware nach Deutschland importiert und diese in Verkehr bringt, also für das Aufkommen von Energiesteuer, EBV-Beitrag, CO2-Abgabe und THG-Kosten verantwortlich ist. Es handele sich um ganz normale Trading-Geschäfte. Eines der anbietenden Unternehmen teilte mit, dass Diesel mit einem Abschlag von 4,00 bis 5,00 €/100l auf Inlandspreisbasis verkauft würde. Hierbei handele es sich jedoch um große Mengen von mindestens zehn kompletten Tankzügen in der Woche. Bei kleineren Mengen wäre der Abschlag geringer. Die Ware würde im großen Umfang von mehreren Unternehmen in Rostock oder im Raum Amsterdam-Rotterdam-Antwerpen zusammen zugekauft und dann an mehrere Lagerhäuser verteilt. Dabei hat die Firma auf Nachfrage nicht angegeben, ob es sich bei den Lagerhäusern um Tanklager handele. Lagerraum würde individuell verwendet werden. Die Auslieferung an den Kunden erfolge per eigenem Spediteur. Ein anderer Anbieter ist nach eigener Aussage nur als Zwischenhändler tätig, und das seit etwa einem Jahr. Sein Vorlieferant kaufe Handelskontingente in Polen, Tschechien und auch Deutschland zu, um diese dann in Deutschland günstig auf den Markt bringen. Die Ware würde allen deutschen Vorgaben entsprechen. Von Gabriele Zindel Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2024. Argus Media group . Alle Rechte vorbehalten.

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