Screen crack is still $23/Brl where it has been since week 44. This may explain the generally ample offers of distillate globally from refiners to take advantage of such margin. Despite this, we do note a large bounce in backwardation in ICE Gasoil Jan/Apr now showing +$7.50, probably reflecting increasing geopolitical tensions. In Biodiesel, all the action in spot barges centered on UCOME with flat price down nearly $38/mt, reflecting now much lower gross replacement margins that are today $200/mt. The situation for RME (winter Biodiesel) was similar but less active, leaving replacement gross margin at $110/mt. Soyoil discount to Rapeseed oil in Northwest Europe was -$85/mt, yet Palm Olein remains at a $64/mt premium to RSO. You can only imagine the discussions in all industrial/cosmetic/food sectors still using palm oil investigating how to permanently substitute palm. This is particularly bad news for Malaysia, who hasn't followed the same direction as Indonesia on Biofuels. Indonesia has also announced today investments of 1.2 billion for a 2-3 million MT Methanol plant in East Java to continue to support the biodiesel industry. Meanwhile, in the US, there were continuing discussions on 45z and also on UCO as the imposition of a 10% tariff on all China imports is increasingly likely with the new administration and especially for UCO. Obviously, delays in IRA 45z guidance are postponing all plans, and it will become increasingly clear over the next few weeks of a marked slowdown in RD production in the US as we close 2024. Considering that the industry has exceeded the RFS mandate all year long, this should not matter much for obligated parties but will have a significant impact on feedstock demand for Dec/Jan.
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