Although ICE gasoil backwardation has bounced a bit it is still much lower than in Feb in Northwest Europe (NWE) as there is little issue with diesel at current flat prices. Logistical blending issues are mostly plaguing biodiesel in NWE with absence of higher CFPP product to blend summer FAME 0. With palm and now UCOME restricted imports, this will force many to deliver lower CFPP product during summer with only a $30/mt premium to FAME. RME remains only product in contango from Q2 to Q3 as rapeseed harvest looms. Some SME cargo were on the way but with change in policy by UK to align themselves with Europe at a 6.5% duty on all biodiesel products, I reckon that blending SME could be very expensive with MIP (Minimum Import Price) relatively high basis spot Biodiesel values. Sunflower oil remains the cheapest soft oil in Europe at $970/mt followed closely by Soyoil at $995/mt whereas replacement Rapessed oil is $1028/mt - this is pushing spot Biodiesel gross margin for RME at $357/mt so you know what biodiesel product will be delivered by vertically integrated producers.
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