Dutch rebates for biofuel continue to strengthen

Singapore’s B24 premium over VLSFO steady

Singapore

Singapore’s B24-VLSFO UCOME has come down by $24/mt in the past week, while its B24-LSMGO UCOME price has declined by $32/mt.

These declines have been driven by a $24/mt fall in the underlying ENGINE conventional VLSFO price and a $35/mt drop in LSMGO price. Besides, the China UCOME FOB benchmark has dropped by $20/mt on the week, exerting additional downward pressure on both biofuel benchmarks.

Bunker suppliers in Singapore sold about 111,000 mt of bio-blended bunkers in September, setting a new monthly record that surpassed the previous high of 79,000 mt in October last year, according to preliminary data from the port authority. Bio-bunker sales made up nearly 3% of Singapore’s total bunker sales (conventional plus bio) in September, an increase from 2% in August.

The port’s B24-VLSFO UCOME premium over pure VLSFO has remained steady at $114/mt, while its B24-LSMGO UCOME premium over pure LSMGO has widened by $3/mt to $98/mt. These premiums are much narrower compared to Rotterdam’s.

Rotterdam

Rotterdam's B30-LSMGO HBE price has dropped by $32/mt in the past week, more than double the $15/mt decline in the B30-VLSFO HBE price. The more pronounced drop in the B30-LSMGO HBE price has been driven by a sharper $38/mt decline in the underlying ENGINE conventional LSMGO price.

PRIMA Markets assessed palm oil mill effluent methyl ester (POMEME) CIF ARA at $1,415/mt on Friday, down by $13/mt on the week. The decline in POMEME price benefits biofuel bunkering as POMEME qualifies for Dutch advanced biofuel rebates, making it appealing to bunker POMEME-based biofuel blends in the Dutch ports.

The Dutch HBE A ticket price has risen for the third consecutive week. PRIMA assessed Dutch HBE A ticket price at €9.85/GJ ($10.69/GJ) on Friday, up from €9.60/GJ ($10.42/GJ) the previous week. This increase translates to a theoretical rebate of $95/mt for B30-VLSFO HBE blends sold in Dutch ports, which is a $2/mt rise from the previous week's rebate of $93/mt.

Biofuel price premiums over pure conventional fuels are $194/mt for B30-VLSFO HBE blends and $163/mt for B30-LSMGO HBE blends.

The ARA's price of B30-VLSFO UCOME has declined in tandem with the B30-VLSFO HBE price in Rotterdam in the past week. As a result, the UCOME blend remains unappealing, holding an $87/mt premium over the rebated HBE price.

By Nithin Chandran

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