Biofuel Bunker Snapshot: Bio premiums widen as POMEME price soars

UCOME and POMEME prices soar in the ARA hub

Dutch rebate for B30-VLSFO around $90/mt

Singapore

Both biofuel benchmarks in Singapore have shot up in the past week, with the port’s B24-VLSFO UCOME price climbing by $28/mt and the B24-LSMGO UCOME price rising by a greater $33/mt. These gains have been bolstered by a $36/mt rise in the underlying ENGINE conventional VLSFO price and a $43/mt increase in the LSMGO price.

Trading activity in the Chinese biodiesel market was slow last week because of the Golden Week holidays. PRIMA Markets assessed the UCOME FOB China benchmark at $950/mt on Friday, unchanged on the week.

PRIMA expects market activity to pick up from 8 October as Chinese traders and suppliers resume work after the holidays.

The port’s B24-VLSFO UCOME premium over pure VLSFO has narrowed by $8/mt to $110/mt, while its B24-LSMGO UCOME premium over pure LSMGO has narrowed by $10/mt to $97/mt. These biofuel premiums have narrowed for the second consecutive week and remain much narrower compared to Rotterdam’s.

Rotterdam

Rotterdam’s B30-VLSFO HBE price has jumped by $57/mt in the past week, while its B30-LSMGO HBE price has risen by a more significant $68/mt.

PRIMA Market’s palm oil mill effluent methyl ester (POMEME) CIF ARA price has gone up by a massive $115/mt to $1,421/mt. This, combined with a $33/mt increase in the underlying ENGINE conventional VLSFO price and a $48/mt rise in the LSMGO price, have driven both biofuel benchmarks higher.

Volatility in the global crude oil market amid tensions in the Middle East has supported UCOME and POMEME prices in the ARA hub, PRIMA commented.

PRIMA assessed Dutch HBE A ticket price at €9.20/GJ ($10.09/GJ) on Friday, slightly up from €9.05/GJ ($9.92/GJ) the previous week. The ticket price is crucial as it determines how much Dutch bunker suppliers can reclaim from authorities when selling advanced biofuels to ships. It theoretically translates to a rebate of around $90/mt, which a supplier can claim for B30-VLSFO HBE blends sold in Dutch ports.

Biofuel price premiums over pure conventional fuels are $163/mt for B30-LSMGO HBE blends and $200/mt for B30-VLSFO HBE blends. These premiums have widened by $20-24/mt in the past week.

UCOME FOB price in the ARA hub has increased in the past week. PRIMA Market's UCOME FOB ARA price has shot up by $115/mt to $1,401/mt in the past week. As a result, Rotterdam’s B30-VLSFO UCOME price has gone up by $57/mt to $828/mt on the week.

By Nithin Chandran

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