Biofuel Bunker Snapshot: Low demand in Singapore and Rotterdam

Singapore’s B24-VLSFO discount to Rotterdam widens

Dutch rebates for biofuel shrink

Rotterdam’s bio-premium over conventional widens further

PHOTO: B0-B100 biodiesel samples in Jakarta, Indonesia, made from palm oil. Shutterstock

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

• Singapore’s B24-VLSFO UCOME up by $7/mt to $712/mt
• Singapore’s B24-LSMGO UCOME up by $13/mt to $810/mt
• Rotterdam’s B30-VLSFO HBE up by $27/mt to $744/mt
• Rotterdam’s B30-LSMGO HBE up by $39/mt to $882/mt
• Rotterdam’s B30-VLSFO UCOME up by $19/mt at $812/mt
• Rotterdam’s B30-LSMGO UCOME up by $30/mt to $950/mt

Singapore

Singapore’s B24-VLSFO UCOME and B24-LSMGO UCOME prices have increased by $7-13/mt in the past week. The bio-bunker prices have gone up despite the UCOME FOB China benchmark holding steady at $970/mt, according to PRIMA Markets.

Bio-bunker price gains in Rotterdam has been steeper than in Singapore. As a result, Singapore’s B24-VLSFO UCOME discount to Rotterdam’s B30-VLSFO HBE has nearly tripled from $12/mt to $32/mt on the week. 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.

Although demand for Chinese biodiesel continues to be low, some Chinese sellers are unwilling to lower their price offers, according to PRIMA.

Some argue that Chinese UCO flows into Singapore could increase if the EU slaps duties on Chinese biodiesel imports. “I believe UCO will keep flowing to Singapore as they currently have the world's largest SAF/HVO refinery,” Indonesian waste-based biofuel firm Beli Jelantah’s founder Faris Razanah Zharfan told ENGINE.

The refinery relies on UCO as a primary feedstock for sustainable aviation fuel (SAF) production. Zharfan says SAF demand is picking up due to airline commitments. Higher inflows of UCO into Singapore may also help boost bio-bunker supply in the port.

Biofuel price premiums over pure conventional fuels in Singapore are $118/mt for B24-VLSFO blends and $87/mt for B24-LSMGO blends. These premiums have remained steady on the week and are much narrower compared to Rotterdam.

Bio-bunker demand remains sluggish in Singapore. At least two suppliers can offer B24-VLSFO stems with lead times of 10-14 days. Demand has also been low in Hong Kong.

Rotterdam

Rotterdam's B30-VLSFO HBE and B30-LSMGO HBE prices have shot up by $27-39/mt in the past week. A steep gain in the price of palm oil mill effluent methyl ester (POMEME) has pushed both benchmarks higher.

PRIMA-assessed the POMEME price in the ARA up by $35/mt in the past week, to $1,393/mt. POMEME is one of the most popular advanced biofuel feedstocks, and POMEME-based biofuels can qualify for advanced biofuel rebates through the Dutch HBE system.

POMEME prices in Europe may continue to move higher amid ongoing EU investigations of Chinese imports. Indonesia exports a substantial volume of POME to China, which gets processed into POMEME and then exported to Europe, Zharfan said.

“[Indonesian] POME I still expect moving to China though volume will not be as huge as before,” Zharfan added. Some European buyers have already become more hesitant to buy POMEME from China because of the ongoing investigations.

Diminishing POMEME imports could put upward pressure on bio-bunker prices in the ARA.

The 2024 ticket price for advanced HBE has come down €9.00/GJ ($9.62/GJ) to €8.25/GJ ($8.82/GJ) and resulted in an $8/mt lower rebate for B30 blends sold in the Netherlands. But the rebate is still around $80/mt now, which 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 biofuel price premiums over pure conventional fuels have widened by $12-15/mt in the past week, to $196/mt for B30-VLSFO HBE blends, and to $137/mt for B30-LSMGO HBE blends.

Bio-bunker demand remains low in the ARA hub. Greater biofuel price premiums and low voluntary demand are among the reasons for a lack up wider uptake, a source says.

Rotterdam’s B30-VLSFO UCOME and B30-LSMGO UCOME prices have gained by $19-30/mt amid a rise in the underlying PRIMA UCOME FOB ARA benchmark. PRIMA-assessed the price up by $35/mt to $1,358/mt.

B24-VLSFO UCOME was indicated at $785/mt in Gibraltar and Algeciras on Friday, up by $23/mt on the week.

By Nithin Chandran

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