Biofuel Bunker Snapshot: Prices fall in Singapore, Chinese UCOME faces EU scrutiny
Low demand and weaker bio-bunker prices in Singapore
EU could impose duties on Chinese UCOME imports
Rotterdam’s bio-bunker prices come off slightly
PHOTO: Several tugs and support vessels assist a huge container ship to moor off at a quay in Rotterdam Harbor. Getty Images
Changes in weekly bio-bunker prices (ENGINE-PRIMA Markets):
- Singapore B24-VLSFO down by $18/mt to $738/mt
- Singapore B24-LSMGO down by $21/mt to $851/mt
- Rotterdam B30-VLSFO (HBE) down by $6/mt to $725/mt
- Rotterdam B30-LSMGO (HBE) down by $5/mt to $867/mt
Singapore
Singapore’s B24-VLSFO UCOME price has come down by 18/mt in the past week. The price drop for B24-VLSFO - the most sought-after biofuel blend - could be as result of lower demand and additional inflows of Chinese UCOME.
Two sources told ENGINE that there have been few enquires for bio-bunker blends in Singapore in the past week.
Chinese UCOME exporters to the EU are being investigated by the European Commission for "unfairly traded biodiesel". The Commission may impose duties on imports of Chinese biodiesel into the EU if these allegations are proven true.
If Chinese producers and suppliers find it difficult to export UCOME to the EU, then they may be forced to shift volumes to Singapore, where the biofuel bunker market is small in terms of volumes sold, PRIMA Markets said.
Some argue that additional inflows of Chinese UCOME into Singapore could pull bio-bunker prices lower in the port. The port’s bio-bunker demand has been too low to match increased supply of Chinese UCOME, another source says.
Chinese UCOME FOB prices edged upwards by $5/mt to $1,005/mt last week, PRIMA data shows.
Rotterdam
Rotterdam’s B30-VLSFO UCOME HBE bunker price has shed just $6/mt in the past week. This price is for an advanced biofuel that is rebated through the Dutch HBE system. The Dutch hernieuwbare brandstofeenheden (HBE) rebate for B30-VLSFO bunkered in the Netherlands has gained by $13/mt to $82/mt over the past week.
The Dutch HBE tickets have traded higher this week, which has supported rebates for bio-bunker blends sold in the Netherlands. HBE tickets of A-listed feedstocks gained by €1.40/gigajoule (GJ) ($1.52/GJ) on the week to midpoint at €8.55/GJ ($9.26/GJ), according to PRIMA.
Bigger Dutch rebates have added downward pressure on Rotterdam's B30-VLSFO HBE bunker price benchmark. And a $6/mt rise in PRIMA's palm oil mill effluent methyl ester (POMEME) price has supported the bunker benchmark and prevented it from falling further.
Market uncertainty about future inflows of Chinese UCOME into the EU could be one of the reasons for the rise in bunker prices for UCOME in ARA - which does not qualify for Dutch rebates. Some EU importers have already paused procuring biodiesel from China due to uncertainties over anti-dumping duties.
High freight rates have also cooled the appetitve for Chinese UCOME by added to import costs.
By Nithin Chandran
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