Biofuel

ENGINE on Biofuel Bunker Snapshot: Chinese UCOME price holds steady despite upcoming EU tariffs

UCOME FOB price remains steady in the ARA hub; ,market adopts a wait-and-see approach for EU tariffs.

Published

8 months ago

July 30, 2024

Admin

ENGINE on Biofuel Bunker Snapshot: Chinese UCOME price holds steady despite upcoming EU tariffs

Once a week, bunker intelligence platform ENGINE will publish a snapshot of biofuel bunker prices in the world’s two biggest bunkering hubs. The following is the latest snapshot:

29 July 2024

UCOME FOB price remains steady in the ARA hub
Market adopts a wait-and-see approach for EU tariffs

Singapore

Singapore’s B24-VLSFO UCOME price has shed $6/mt in the past week, while its B24-LSMGO UCOME price has declined by a greater $11/mt. Declining values of pure VLSFO ($2/mt) and LSMGO ($10/mt) have contributed to drag the two benchmarks lower.

The PRIMA-assessed UCOME FOB China benchmark was at $990/mt on Friday, unchanged on the week. The benchmark remained steady even after the European Commission (EC) announced provisional tariffs on Chinese imports of biodiesel.

The UCOME FOB China benchmark has been assessed between $990-1,000/mt over the past two weeks. According to PRIMA Markets, factors like the EU's provisional anti-dumping duties and Chinese officials' push for domestic blending policies have restricted price volatility in the UCOME market.

Offer levels ranging between $1,010-1,050/mt for UCOME FOB China in bulk were seen before the provisional duties were revealed by the EU.

Singapore’s B24-VLSFO UCOME price premium over pure VLSFO has narrowed by $4/mt on the week to $113/mt. Lead times of up to 10 days are generally recommended to secure B24-VLSFO from suppliers, a source said.

Spot bio-bunker demand remains low in Singapore, two traders said.

B24-VLSFO is priced about $10/mt lower in Singapore than in Guangzhou, and $30/mt lower than in Hong Kong.

Rotterdam

The port’s bio-bunker prices have declined slightly more than Singapore’s. Rotterdam’s B30-VLSFO HBE price has dropped by $13/mt in the past week, while its B30-LSMGO HBE price has plunged by $17/mt.

The two benchmarks have declined despite palm oil mill effluent methyl ester (POMEME) price holding steady. PRIMA assessed the POMEME price in the ARA at $1,383/mt on Friday, unchanged on the week.

POMEME-based biofuels qualify for Dutch HBE credits. This makes POMEME a popular advanced biofuel feedstock as Dutch HBE units qualify for bunker suppliers and can translate into price rebates for buyers.

PRIMA has assessed HBE A tickets at €8.45/GJ ($9.16/GJ), which is up by €0.45/GJ ($0.42/GJ) on the week. This equates to a theoretical $82/mt rebate for B30 HBE blends sold in the Netherlands, up by $5/mt on the week.

Biofuel price premiums over pure conventional fuels in Rotterdam are $186/mt for B30-VLSFO HBE blends and $139/mt for B30-LSMGO HBE blends.

Rotterdam’s B30-VLSFO UCOME price has declined by $19/mt in the past week, which is greater than its B30-VLSFO HBE price drop. Despite a bigger price drop, the UCOME blend is priced about $65/mt higher than the HBE blend. This is because UCOME-based biofuel blends don’t qualify for Dutch HBE credits, making them less attractive.

The UCOME FOB ARA benchmark was assessed at $1,363/mt by PRIMA on Friday, unchanged on the week. PRIMA Markets says, “the market is adopting a wait and see attitude to the [EU’s] anti-dumping duties, as the current oversupply situation in the market is still preventing demand from flourishing and prices to spike in the short to medium-term.”

By Nithin Chandran

Photo credit and source: ENGINE
Published: 30 July 2024

Related Topics:Bunker fuel - Biofuel Business - Events

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“Before setting out on the voyage from Singapore to EU, adding B24 VLSFO was vital for us to meet emissions requirements imposed by the EU. And having both fuel quality, paperwork, and delivery in place and in time for an operation with short notice, we called Dan-Bunkering,” said Thomas Nielsen, Operations Director and Parter at Union Bulk.

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Photo credit: Dan-Bunkering
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