According to the Vesper West-EU Price Index, the price of RME surged to €1182 | $1279 / mt (FOB ARA) from €1124 | $1222 / mt on 2024-03-20, marking a significant increase of 4.9%. Similarly, the price of UCOME experienced a notable rise, reaching €1259 | $1363 / mt (FOB ARA) from €1203 | $1308 / mt on 2024-03-20, reflecting an increase of 4.7%. Furthermore, the price of FAME 0 climbed to €1142 | $1236 / mt (FOB ARA) from €1066 | $1159 / mt on 2024-03-20, representing a steady increase of 7.1%. Furthermore, the Vesper West-EU Price Index for HVO (UCO) rose to €1696 | $1836 / mt (FOB ARA) from €1624 | $1766 / mt on 2024-03-20, representing a notable increase of 4.4%.
Both ARA biodiesel prices, as well as prices for feedstocks in Europe and at origins, have strengthened since the previous report (see Figure 1).
Figure 1: Vesper Spot Outright Biodiesel Prices (USD/mt)
The market is focused on the announcement that Germany allowed HVO100 and B10 diesel sales at public pumps from 13 April at the earliest. Interestingly, the German Bundesrat also approved the gradual reduction of tax advantages for agricultural diesel. These benefits are set to be fully phased out by 2026, a decision made within the framework of the second Budget Financing Act’s approval. “There is a big demand for HVO in Germany because the HVO100 is now allowed in road transport,” said one Dutch-based HVO broker. This news was supportive of HVO prices (see Figure 2), which in turn filtered out into prices of other biodiesels (see Figure 1).
Figure 1: Vesper Spot Outright HVO Prices (USD/mt)
Meanwhile, HBE tickets have shown notable growth recently, with the Netherlands HBE-O reduction obligation current year 1 rising from below 8 Euro/GJ to nearly 8.800 Euro/GJ, as reported by market sources. “Some producers missed the production window, and also higher HVO prices contributed to the ticket growth,” said one source.
Meanwhile, some feedstock importers in the EU still complain about the freight rates eating up margins. “The decline in container prices by 25% hasn’t been reflected in transportation costs, largely due to insurance rates in the Red Sea. Freight charges from the Cape of Good Hope route remain high,” said one source. “Freight rates still don’t allow us to make any import margins,” said one back-to-back UCO trader. “Oil majors are doing better than small and medium-sized companies as they normally buy larger parcels. Also, some of them have time-chartered vessels, which allows them to save up on freight,” said one source. “The Italian biodiesel market is not easy. There was not much demand, feedstock prices were up and biodiesel prices are relatively low in the last tenders. UCO Italian scheme is EUR 980 / mt in Italy, POME Italian scheme is USD 850 / mt fob Indonesia/Malaysia,” said one Italian market player. The biodiesel and feedstocks export markets in China remained in a state of stability as traders adopted a cautious approach, awaiting the outcome of the EU’s anti-dumping investigation. Reports indicate that a delegation from the EU anti-dumping investigation committee is currently visiting Chinese biodiesel producers. The ongoing EU investigation has notably eroded market confidence in China, according to the sentiments expressed by traders.
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