18 November 2010 17:22 [Source: ICIS news]
LONDON (ICIS)--European biodiesel premiums have recovered most of the sharp losses posted during the past week as China’s attempts to limit inflation on food prices had little effect on the market and concerns over the Republic of Ireland’s debt crisis eased, market participants said on Thursday.
Biodiesel values had seen a sharp decline in values during the past week, with some grades slipping $30-50/tonne (€22-37/tonne), as China announced it would limit inflation on food prices by curbing speculation and worries over the Irish debt crisis pushed the US dollar up against the euro.
The move from China placed downward pressure on the prices of biodiesel feedstocks such as soybean oil, palm oil and rapeseed oil, markets sources said.
However, market participants said the announcement by China has had little effect on the market and described current buying interest from China as strong.
The debt crisis in the Republic of Ireland also played a part in decreased premiums as the US dollar strengthened against the euro, compounding the downward trend on feedstock values, sources said.
As biodiesel feedstock prices have a negative correlation with the US dollar, Ireland’s likelihood of a bail out from the European Union pushed the currency down against the euro.
Bids for rapeseed methyl ester (RME) had increased by $10/tonne to $575/tonne FOB (free on board) Rotterdam, while fatty acid methyl ester (FAME) had seen offers of $475/tonne FOB Amsterdam-Rotterdam-Antwerp, despite being traded in a range of $445-450/tonne FOB Rotterdam on Wednesday.
Biodiesel flat prices are calculated by adding premiums to gasoil values and on Thursday afternoon gasoil futures were trading at $715.50 CIF (cost, insurance and freight) NWE (northwest ?xml:namespace>
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