Hurricane, finance storms crimp US biodiesel

17 September 2008 21:40  [Source: ICIS news]

AUSTIN (ICIS news)--US biodiesel exports have nearly stopped due to infrastructure damage caused by Hurricane Ike and to financial tremors caused by the stock market meltdown, sources said on Wednesday.

“It’s dead. Not much going on here or in Europe, and there’s lot of contract cancellations because of the storm,” one producer said from the sidelines of the Third Annual Texas Biodiesel Conference and Expo.

Domestic biodiesel prices have followed plunging crude oil prices on the NYMEX and soybean oil prices on the Chicago Board of Trade (CBOT).

Soy methyl ester (SME) prices were heard on Tuesday at $4.15/gal (€0.78/litre) FOB (free on board) Midwest, compared with $4.45-4.95/gal the week before. Fatty acid methyl ester (FAME) prices fell to $3.70/gal, after hitting $4.10-4.20/gal a week earlier, sources said.

This was despite large supply drops, as producers GreenHunter Energy and Renewable Energy Group (REG) closed their Houston refineries after Hurricane Ike blew through the Gulf coast on Saturday.  Damage that the hurricane inflicted on port facilities have also put a crimp on overseas biodiesel shipments.

Producers who have material to sell are having a hard time finding customers, as buyers have adopted a wait-and-see stance as the current chaos in the finance markets unfolds, the producer said.

($1 = €0.71)

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By: Ben Lefebvre
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