Biofuel Bunker Snapshot: Demand for Chinese biodiesel remains thin amid EU investigations

Rotterdam’s bio-bunker prices fall steeply

Singapore’s biofuel sales jumped in March

PHOTO: Nieuwe Maas and Erasmus Bridge in Rotterdam. Getty Images

Changes in weekly bio-bunker prices (ENGINE-PRIMA Markets):

• Singapore’s B24-VLSFO UCOME down by $2/mt to $742/mt
• Singapore’s B24-LSMGO UCOME down by $19/mt to $847/mt
• Rotterdam’s B30-VLSFO UCOME down by $22/mt to $811/mt
• Rotterdam’s B30-LSMGO UCOME down by $46/mt to $919/mt
• Rotterdam’s B30-VLSFO HBE down by $18/mt to $724/mt
• Rotterdam’s B30-LSMGO HBE down by $41/mt to $832/mt

Singapore

Singapore’s B24-VLSFO UCOME price has remained steady over the past week, while its B24-LSMGO UCOME price has shed $19/mt. The price moves have narrowed B24-LSMGO premium over B24-VLSFO from $122/mt last week to $105/mt.

Prompt bio-bunker availability is tight in Singapore, two sources say. This has prevented prices of the most sought-after biofuel blend, B24-VLSFO UCOME, from dropping steeply in the past week.

UCOME FOB China bulk prices have remained steady over the past week. “Offer levels for the product were reported at consistent levels throughout the week [previous week],” according to PRIMA Markets.

Chinese UCOME ARA FOB prices were mostly stable last week as demand was very thin because of the EU’s anti-dumping investigations. Some Chinese biodiesel refineries are running at lower rates as they anticipate the EU's dumping duty to be applied in the near future, PRIMA Markets stated.

Demand for Chinese biodiesel from European buyers has decreased because of the investigations, sources say. This could potentially lead to more inflows of Chinese UCOME into Singapore and may drag bio-bunker prices lower in the port. Going forward, Chinese UCOME may head to Singapore for the maritime sector, but at what prices remains to be seen, Indonesian waste-based biofuel firm Beli Jelantah’s founder Faris Razanah Zharfan told ENGINE.

Singapore’s bio-bunker sales rebounded in March. Around 66,000 mt of bio-bunkers were sold in March, more than four times the 16,000 mt sold in the shorter February month. The numbers are still lower than the peak bio-sales of 79,000 mt noted last October.

Rotterdam

Rotterdam’s B30-VLSFO and B30-LSMGO UCOME prices have come down by $22/mt and $46/mt, respectively. A steep drop in UCOME FOB ARA price has supported the declines in both benchmarks. PRIMA-assessed UCOME FOB ARA price has plunged by $83/mt to $1,280/mt over the past week.

PRIMA says the UCOME ARA price has declined “in line with the rest of the biodiesel complex, which was seen depressed in line with a faltering gasoil market as well as weakening vegetable oils.”

B24-VLSFO UCOME has been indicated about $10/mt lower in Gibraltar than B30-VLSFO UCOME indicated in Rotterdam.

Rotterdam’s B30-VLSFO and B30-LSMGO HBE prices have come down by $18/mt and $41/mt, respectively. Biofuel price premiums over pure conventional fuels are $114/mt for B30-VLSFO blends and $68/mt for B30-LSMGO blends.

The 2024 ticket price for advanced Dutch hernieuwbare brandstofeenheden (HBE) has come down from €9.61/GJ ($10.25/GJ) to €9.19/GJ ($9.80/GJ) and resulted in a $3/mt less rebate for B30 blends sold in the Netherlands. The rebate is still around $87/mt and makes it lucrative to bunker advanced biofuel blends in Dutch ports compared to ports in Belgium and other countries where discounts don’t exist.

Rotterdam’s B30-VLSFO HBE decline has been greater than Singapore’s B24-VLSFO. Its B30-VLSFO HBE discount to Singapore’s B24-VLSFO has widened from just $2/mt in the previous week to $18/mt. These are, of course, different blend ratios, but they represent the lowest-priced typical biofuel blends in the world’s two biggest bunker ports for comparison.

PRIMA-assessed POMEME in the ARA dropped by $72/mt on the week, which has also put downward pressure on bio-bunker prices in Rotterdam. 

By Nithin Chandran

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