National Diesel Near $6 and Biofuel Margins Are Strong
Gross margins are the main story at the end of this week. I am using finished biofuel value less local feedstock value as a simple screen before yield loss, hydrogen, utilities, freight and fixed costs. In Northwest Europe, FAME0 near $1,771/mt against Dutch soybean oil at €1,205/mt, equivalent to about $1,400/mt at EUR/USD 1.162, leaves roughly $370/mt. RME near $1,866/mt against Dutch rapeseed oil at €1,245/mt, or about $1,447/mt, leaves around $419/mt. Using the late-August implied CIF ARA UCO reference near $1,472/mt, UCOME around $1,881 leaves roughly $409/mt and HVO Class II near $2,826 leaves about $1,354/mt before HVO’s larger processing burden. The striking point is that the three biodiesel pathways now cluster around roughly $370 to $420/mt of simple gross spread, despite using quite different feedstocks.
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