HVO II Takes Center Stage as Europe Trades Diesel Tightness
The clearest new market signal this Friday is HVO Class II paper. Final Week 32 turnover reached 368 kt after Friday added another 99 kt, up 65.9% from 221.8 kt in Week 31 and 4.5 times the 81.9 kt traded in Week 27. Total outright RME, FAME0, UCOME and HVO II turnover reached 668.5 kt, up 22.5% week on week, but the increase was almost entirely concentrated in HVO. HVO II alone added 146.2 kt while the other three products combined lost 23.5 kt. Its share of four-product turnover rose from 40.6% to 55.0%. September HVO II traded as high as $1,696/mt, October and November at $1,752/mt and Q4 at $1,735/mt. Germany, by comparison, consumed only 270.7 kt of physical HVO during the entire first five months of 2026 and 59.1 kt in May. One week of European HVO paper therefore exceeded five months of German physical HVO consumption by 36%. Gross paper turnover is not net speculative positioning, and producer hedging remains part of the activity, but the concentration of volume increasingly supports the idea that HVO II is being used as a liquid hedge or proxy for European diesel exposure.
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