ICIS’ Global Biodiesel price report contains news and analysis of market movements around the world. Our price assessments focus on European spot, South America, North America domestic and Asia spot.
The commentary highlights the influencing factors driving prices, and includes feedstock prices and graphs to reflect changing prices in this weekly report. Whether you are directly buying or selling on the biodiesel or related markets, this informative report will help you to make confident business decisions.
Updated to Q1 2020
Producers in Malaysia and Indonesia continued to maintain high production in order to meet local blending mandates, especially in Indonesia, as the nationwide B30 blending mandate was rolled out starting January 2020. By mid-quarter, it was estimated that B30 was achieved in 95% of all refilling stations in Indonesia. However, production fell by the end of the quarter, due to lower diesel consumption stemming from anti-coronavirus restrictions.
Domestic demand from Malaysia and Indonesia increased initially at the start of the year in order to meet the blending mandates, especially in Indonesia. However, it softened towards the end of the quarter after diesel demand weakened, especially in Malaysia. Overseas demand was already lackluster at the start of the year, due to the cold weather during winter and an unfavorable gasoil-palm oil spread. Overseas demand disappeared when crude values crashed, and gasoil prices nose-dived.
Biodiesel supply remained mostly constant in Q1, until output rates fell dramatically towards the end of the quarter in reaction to lower demand expectations. Some producers are continuing to produce in order to supply by-product glycerine into the sanitizer market, but many were running at 50% lower output rates or considering shutdowns by the end of March.
Biodiesel consumption plummeted by the end of Q1 after a strong start to the year. The spread of coronavirus decreased road user demand by up to 90% in some countries and blenders were working through road fuel inventories intended for earlier in the year while others have been using hydrotreated vegetable oil. Demand may have been reduced by around 40-50% for March, a huge dent in expectations given higher 2020 renewable blending mandates.
US Q1 biodiesel production fell, especially after the March plunge in crude oil prices against the backdrop of elevated feedstock costs throughout most of the quarter began to weigh on production margins among large producers. Elevated feedstock into mid-March had already been weighing on small producers that depend more heavily on the deferral $1/gal tax credit to fund their operations. The situation was made worse after crude oil prices plunged and started to squeeze the margins among large producers.
US Q1 biodiesel demand fell amid weak demand for volumes during the winter driving season, made worse by the March plunge in crude oil prices against the backdrop of decreased fuels demand during the coronavirus pandemic. Demand, which is typically at its lowest in the winter, worsened as low crude oil prices economically disincentivised fuels producers to buy any extra volumes outside their minimum requirements under the federal mandate.
We offer the following regional Biodiesel analysis and news coverage to keep you informed of factors and developments affecting prices in the Biodiesel marketplace.
News & analysis
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.
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Biodiesel is the name of a clean burning alternative fuel, produced from renewable resources. The most commonly used feedstocks are rapeseed, soy and palm oil.
Biodiesel is a clean burning alternative fuel, produced from renewable resources. The most commonly used feedstocks are rapeseed, soy and palm oil. Corn and tallow are also used. Rapeseed methyl ester (RME) is mainly produced in Europe; soy methyl ester (SME) comes mainly from the Americas; and palm methyl ester (PME) from Asia, in particular Malaysia and Indonesia.
Biodiesel is made through a chemical process called transesterification to make the methyl ester with glycerine and is produced as a by-product.
Biodiesel can be used in compression-ignition (diesel) engines and most oil-fired boilers. It is suitable for most applications where regular diesel is currently used. It can also be used in most modern diesel engines without modification, including those in passenger cars, sport utility vehicles, light trucks, buses, ships, trains, off-road heavy equipment and mining equipment, as well as for home heating fuel, power generation and in two-stroke engines (as a mixing agent).
Rapeseed oil, fats and grease, crude palm oil