Biofuel Bunker Snapshot: Sharp gains for ARA bio-bunker prices

Higher Chinese UCOME prices support Singapore’s B24 blends

Rotterdam prices lifted by both conventional and biofuel gains

Bio price premiums still unattractive for most vessels

Singapore

B24-VLSFO has gained $13/mt in Singapore in the past week, which outcompetes its B24-LSMGO grade but is still far off the price gains we have seen in the ARA in the past week.

A B24-VLSFO deal was reported on Monday at $729/mt, or $8/mt below the benchmark from Friday. No further details of the stem’s size or lead time are known, but it was priced considerably lower than another indication of $745/mt in the market.

PRIMA Markets assessed UCOME FOB China up $5/mt on the week, to $970/mt, and has recorded offers above $980/mt in the past week. Higher UCOME prices from China, a key regional exporter of finished biofuel and bio feedstock, will influence UCOME-based biofuel bunker prices in Singapore and other regional ports.

Several sources in the Chinese biofuel and feedstock markets think local biodiesel prices have now bottomed out and are gearing up for a potential recovery in the short to medium term, PRIMA reports.

B24-VLSFO is also offered for bunkering in China's Guangzhou and has been indicated at premiums of around $10/mt above Singapore's price.

Singapore’s B24-VLSFO price premium over its considerably more popular pure VLSFO grade has narrowed by $3/mt on the week, to $107/mt. Without ulterior incentives to opt for biofuel than price, this is a tough proposition for most buyers.

There is not a lot of B24-VLSFO spot demand, a Singapore bunker supplier says, but it does have some term volumes, and that demand mainly comes from container ships.

Ships carrying containers, passengers or other cargo that is close to consumers are typically more likely to opt for biofuel because some consumers are environmentally conscious and willing to pay a little more for greener products.

Rotterdam

Biofuel bunker blend prices in Rotterdam and other ARA ports are up by $20-21/mt with support from rising values for both conventional (+$19-20/mt) and bio (+$23/mt) components.

PRIMA has assessed HBE A tickets steady at €8.15/GJ ($8.75/GJ) since 20 June. This ticket price is important because it helps determine how much Dutch bunker suppliers can claim back from their authorities when they sell advanced biofuel to ships.

B30-VLSFO HBE now generates $77/mt that Dutch biofuel suppliers can claim back, and which we have knocked off the ENGINE-PRIMA delivered bunker price above.

B30-VLSFO UCOME ARA has risen in tandem with B30-VLSFO HBE Rotterdam in the past week, and the UCOME blend is still unattractive at a $67/mt premium over the rebated HBE price.

Suppliers in Gibraltar and Algeciras are not allowed to carry blends with more than 25% biofuel in barges, unless they are special IMO Type 2 chemical tankers. And there are no government subsidies for biofuels on the EU’s advanced list. UCOME-based B24-VLSFO is therefore a go-to biofuel bunker grade, and it has risen by $19/mt in the past week. That widens its premium over Singapore’s equivalent grade to $67/mt.

By Erik Hoffmann

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