GreenHunter to target Europe biodiesel market

09 June 2008 21:07  [Source: ICIS news]

HOUSTON (ICIS news)--GreenHunter Energy, the largest US biodiesel producer, said on Monday that it would target the European export market as it discounted fears that more material there could lead to a supply glut.

European buyers were paying a premium for blended biodiesel, which suggested to him that demand remained high, said Jack Zedlitz, spokesman for the Grapevine, Texas, company.

“It doesn’t make sense to me that there’s a glut of biodiesel in the market,” he said. “Certainly some of our product will go to Europe, as that is where the premium is being paid right now.”

Zedlizt said GreenHunter’s new $70m (€44m) Houston refinery would produce about 4m gal of biodiesel in June before increasing to a nameplate capacity of 8m gal/month by August. The company would focus on the truck and marine fuel markets in the US while it kept an eye on the European arena, he said.

But European players, describing a market in which sellers have multiplied while price volatility has scared away some buyers, said that biodiesel from Greenhunter’ new refinery could lead to a supply glut and depress prices.  

An abundance of offers led to European prices for fatty acid methyl ester (FAME) to drop by an average of $35/tonne to $1,510-1,560/tonne FOB (free on board) Rotterdam for the week ended 4 June, according to global chemical market intelligence service ICIS pricing.

Last week in the US, prices for FAME of unspecified feedstock and cold flow plug point (cfpp) moved moving in bid/offers of about $4.54-4.65/gal, according to industry sources. A federal blending subsidy would knock $1 off the price, making the product more attractive to European buyers.

($1 = €0.63)

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By: Ben Lefebvre
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