Biofuel Bunker Snapshot: Chinese UCO price edges closer to soybean oil

Singapore’s B24-VLSFO discount to B24-LSMGO widens

Bio-premiums steady in Rotterdam

Singapore

Singapore's B24-LSMGO UCOME price has risen by $23/mt over the past week, reflecting an identical $23/mt increase in the underlying ENGINE LSMGO price. The port’s B24-VLSFO UCOME price has gained by a modest $3/mt, further widening the B24-VLSFO UCOME discount to B24-LSMGO UCOME, to about $100/mt.

PRIMA Markets noted that the Chinese UCO FOB price is trading at near parity with the domestic soybean oil (SBO) price. Offers for Chinese UCO FOB in bulk ranged between $1,000-1,050/mt on Friday, the price reporting agency said.

Rising used cooking oil (UCO) prices could make biofuel bunkering more expensive in Singapore as the country imports substantial amounts of UCO from China. UCO is typically reacted with methanol as a catalyst to produce used cooking oil methyl ester (UCOME).

The freight rate from China to Singapore for an MR tanker has come off by $1.75/mt in the past week, to $13.25/mt now.

Spot biofuel demand continues to be low in Singapore. One supplier can deliver B24-VLSFO with lead times of up to 10 days. Suppliers in Singapore sold about 115,000 mt of bio-blended bunkers in November, down from 145,000 mt sold in October.  

Singapore’s B24-VLSFO UCOME premium over pure VLSFO has widened by $6/mt to $146/mt, while its B24-LSMGO UCOME premium over pure LSMGO has remained steady at $115/mt.

Rotterdam

Biofuel benchmarks in Rotterdam have gained in the past week, with the prices of both B30-VLSFO and B30-LSMGO HBE increasing by $11-12/mt.

Dutch rebates for biofuel have dropped sharply in recent weeks. PRIMA assessed the Dutch HBE ticket price for 2024 at €12.80/GJ ($13.46/GJ) on Friday, down from €15.25/GJ ($16.04/GJ) in the previous week. This equates to a theoretical rebate of $120/mt for B30-VLSFO HBE blends sold in Dutch ports. That is down from $143/mt a week earlier, and a significant decline from the record high of $220/mt noted last month.

Biofuel price premiums over pure conventional bunker fuels in Rotterdam are $180/mt for B30-VLSFO HBE blends and $139/mt for B30-LSMGO HBE blends. These premiums have remained steady in the past week.

Prices for UCOME-blends have declined in the past week, with both ARA B30-VLSFO and B30-LSMGO UCOME prices dropping by $13/mt. Despite this decline, ARA B30-VLSFO UCOME remains $113/mt more expensive than the rebated B30-VLSFO HBE price, as UCOME-based biofuels do not qualify for Dutch advanced biofuel rebates.

By Nithin Chandran

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