02 June 2011 22:54 [Source: ICIS news]
HOUSTON (ICIS)--Use of biodiesel as a diesel blendstock is increasing in the US, traders said on Thursday.
“We are seeing strong physical trading,” one said.
“Good money being made,” another added.
Increased blending is taking place in the off-road diesel market, which includes farm vehicles, sources said.
Large petroleum-based groups were also said to be doing more biodiesel blending, using up to a 20% blend of the biofuel, according to traders.
The uptick in biodiesel use continued to be primarily taking place in the midwestern region of the US, especially in Indiana, Iowa and Illinois, which have state and local incentives to promote the fuel.
US biodiesel prices were last assessed at $5.00-5.50/gal (€0.92-1.02/litre) FOB (free on board) midwest for B100 soy methyl esters (SME).
Fatty acid methyl esters with zero cold flow plug point (FAME 0 cfpp) were last assessed at $5.00-5.37/gal for B100 FOB midwest.
B100 prices include the $1/gal US federal tax incentive. As such, blend prices would be $4.00-4.50/gal FOB midwest for SMEs and $4.00-4.37/gal for FAME 0 cfpp.
Biodiesel plants that are known to be running include Cargill, Peter Cremer, Hero BTX and at least one REG location.
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