FAME 0 premiums increase on tighter supply

03 May 2013 11:20  [Source: ICIS news]

LONDON (ICIS)--European fatty acid methyl ester (FAME) 0 premiums over ICE gasoil have increased on tighter availability, according to sources late on Thursday.

Premiums for both Renewable Energy Directive (RED) certified product and non-RED product have increased by $10-15/tonne (€8-12/tonne), with FAME 0 RED at $290-300/tonne FOB (free on board) Rotterdam and FAME 0 at $245-255/tonne FOB Rotterdam.

Supply of FAME 0 has tightened following a decrease in soybean methyl ester (SME) and palm methyl ester (PME) imports.

Fewer imports are arriving in Europe because of the European Commission’s ruling that all biodiesel imports from Argentina and Indonesia must be registered as part of its ongoing investigation into allegations that subsidised biodiesel from the two countries was dumped in Europe.

The lack of SME has meant that producers are substituting it with rapeseed methyl ester (RME) in FAME 0 blends, providing the economics are favourable.

As a result of both tighter supply and the substitution of SME with the more expensive RME, FAME 0 premiums have increased.

($1 = €0.77)

By: Sarah Trinder
+44 20 8652 3214

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