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US imports reach 543K MT of UCO for Renewable Diesel production through end of Jun

China Used Cooking Oil imports account for 233Kt of this amount with the rest coming from Australia, South America and Canada. Renewable diesel demand seems insatiable at this time (especially for Q3) requiring close to 12.6 Mil MT of feedstock while US Fats production is only 8.2 Mil MT - this excludes Virgin Vegetable oils like Soy and Rapeseed oil. US hardly running out of oils but definitely US will no longer be an exporter of fats for Biodiesel as it used to be. We can see that RINs have essentially plateaued at 1.40 but clearly with a bumper crop on the way in 4-5 weeks in US, it will be difficult to hide the pressure on margins. Biodiesel crush remains stable at at a negative -1.21 per gallon (363/mt) on Heating oil expiry. European Gasoil does not expire for another couple of weeks but the easing of navigation has had a dramatic effect on futures with large margin calls. However, note that we are still looking at $99/mt backwardation through Apr24. FAME still trading at 73% of BOGO reflecting that demand is simply not stellar. UCOME values holding up but having a hard time to exceed +$700 over ICE Gasoil. Things to watch over next month will be Rhine river in Europe and Oct 2 debt ceiling issues in US that could make it difficult to collect BTC in Q4.

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