Chinese UCO Flows to US Revive—But Is It Really About Biofuels?
Imports of Chinese used cooking oil (UCO) into the United States have surged in recent weeks with the Trump tariff pause of 10%, with over 100,000 metric tons booked for July and August arrival—an unusual move considering that fuels produced from imported UCO no longer qualify for the 45Z tax credit starting this year. Yet the margin is compelling: FOB China UCO is offered around $1,080/MT, while spot values on the U.S. Gulf Coast hover near $1,444/MT. After freight and discharge costs (~$165/MT), traders are landing product at $1,247–1,262/MT, locking in gross margins of $182–197/MT. With these trades occurring outside the renewable fuel compliance system, the likeliest scenario is that the material is redirected into domestic feed or industrial markets—pressuring U.S. UCO values while delivering risk-free spreads. These imports may also serve a secondary purpose: to destabilize the domestic waste oil complex ahead of a critical tariff review deadline on August 11.
Want to read more?
Subscribe to globalbiodiesel.com to keep reading this exclusive post.
