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 Q2 2020
Production in Malaysia and Indonesia decreased in a bid by producers to manage inventories, after demand in both the domestic and overseas markets fell. By the end of Q2, plant operating rates recovered slightly, following an increase in domestic consumption of diesel, but many were still running at lower-than-usual rates.
Demand slumped when crude oil prices crashed at the start of Q2, widening the price spread between biodiesel and gasoil. International spot demand fell as there was limited incentive to blend biodiesel, amid much cheaper gasoil. Demand remained weak through the quarter. Domestic demand saw support from blending mandates which the respective governments had pledged to continue observing, but diesel consumption fell on coronavirus-related restrictions.
Operational capacity at biodiesel producing plants fell between 30% and 50% in April during the height of the pandemic in Europe. PME imports from Asia and SME imports from Argentina contributed largely to accumulated volumes which were held in storage facilities across the region. Production levels improved marginally in June as the market started to work through high volumes of stored biodiesel.
The initial breakout of the virus pandemic brought the European demand for biodiesel to a near standstill. Germany led the biodiesel demand recovery at the end of May after the devastating impacts of the coronavirus. Buying interest was boosted through an uptick in diesel consumption across France, Italy and Spain. The biodiesel market was slightly cushioned from the fall in road transport through consumption by heavy duty trucks and agricultural machinery throughout Q2.
Supply increased as fully integrated, soy-based biodiesel producers that hedge their utilisation rates at least one quarter ahead ramped up production to meet the federal mandate on biodiesel production ahead of the spring and summer driving seasons. These producers were supported by the federal $1/gal biodiesel tax credit and increased 2020 biodiesel blending mandate. Smaller, non-integrated producers ran at low rates or were shut, as the tax credit was not enough to offset production costs.
Demand decreased by an estimated 10-15% over Q2 amid the coronavirus. Fuel demand fell due to lockdowns. Diesel demand was not impacted as heavily as gasoline demand, as most US vehicles run on gasoline. A bump in demand from the trucking sector amid increased demand for essential goods and stockpiling/panic buying, as well as an overall increase in online shopping during the coronavirus helped to offset other demand losses.
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.
Over 25 years of reporting on key chemicals markets, including Biodiesel, has brought global recognition of our methodology as being unbiased, authoritative and rigorous in preserving our editorial integrity. Our global network of reporters in Houston, London, Singapore, Shanghai, Guangzhou, Mumbai, Perth and Moscow ensures unrivalled coverage of established and emerging markets.
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