Biofuel Bunker Snapshot: Chinese UCO exports to Europe fell in August

The US was the top importer of Chinese UCO in August

Dutch rebates for biofuel remain largely steady

Singapore

Singapore's B24-VLSFO UCOME price has decreased by $5/mt, while its B24-LSMGO UCOME price has risen by $4/mt in the past week.

The price of B24-VLSFO UCOME has decreased due to a $7/mt drop in the underlying ENGINE conventional VLSFO price, while a $6/mt increase in the conventional LSMGO price has supported a rise in B24-LSMGO UCOME price.

PRIMA Markets assessed the UCOME FOB China benchmark at $970/mt on Friday, unchanged on the week. About 290,000 mt of used cooking oil (UCO) was exported by China in August, with the US being the major importer accounting for 160,000 mt of the total imports, PRIMA reported citing data from Chinese custom authority. Other key importers included Singapore (53,000 mt), Malaysia (25,000 mt) and Spain (20,000 mt).

“With only around 38,000 mt of Chinese UCO being exported to Europe in August, this left the European buyers with a seemingly ever-shrinking share of the total Chinese exports of just 13%,” PRIMA said. The European Commission's provisional duties on Chinese biodiesel imports, effective from 16 August, impose tariffs of up to 36.4% on EU imports of biodiesel from China. This has dampened European buyers' demand for Chinese biodiesel.

Suppliers in Singapore sold about 68,000 mt of bio-blended bunkers in August, up from 49,000 mt sold in July. Bio-blended bunker sales grew for the second consecutive month in August and were the highest since October 2023, according to preliminary figures from the port authority. Despite a jump in sales in August, spot demand for bio-bunkers in Singapore remains low, two sources said.

Rotterdam

Rotterdam’s B30-VLSFO HBE and B30-LSMGO HBE prices have risen by $9-10/mt in the past week. These increases are supported by a $6/mt rise in the underlying ENGINE conventional VLSFO price and a $4/mt rise in conventional LSMGO price.

Additionally, a $19/mt increase in the underlying PRIMA's POMEME CIF ARA price has added further upward pressure on both biofuel benchmarks.

PRIMA assessed Dutch HBE A ticket price at €8.50/GJ ($9.43/GJ) on Friday, down from €8.60/GJ ($9.54/GJ) the previous week. This equates to a theoretical rebate of $83/mt for B30-VLSFO HBE blends in Dutch ports, reflecting a $1/mt drop week-on-week. Unlike UCOME-based biofuel blends, POMEME-based biofuel blends are eligible for advanced biofuel rebates under the Dutch HBE system. This makes it lucrative to bunker advanced biofuel blends in the Dutch ports compared to ports in other countries where discounts don't exist.

Biofuel price premiums over pure conventional fuels are $186/mt for B30-VLSFO HBE blends and $153/mt for B30-LSMGO HBE blends. These premiums have widened by $4-5/mt in the past week.

Rotterdam’s B30-VLSFO UCOME price has risen by $10/mt in the past week, while its B30-LSMGO UCOME price has increased by $8/mt. Both biofuel benchmarks have risen with support from a $19/mt increase in the underlying PRIMA UCOME FOB ARA benchmark.

The B30-VLSFO UCOME is priced about $78/mt higher than the B30-VLSFO HBE price in Rotterdam.

By Nithin Chandran

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