11/30/2023 | News release | Distributed by Public on 11/30/2023 11:52
Mediterranean marine biodiesel blend prices trended downwards in the second half of November as subdued bunkering demand combined with easing fundamentals in the underlying markets.
B24 dob Algeciras-Gibraltar slipped to an average of $774.43/t on 15-28 November, down from $783.68/t on 1-14 November. Market participants reported firm trading activity in the first two weeks of the month, with spot deals amounting to 2,300t reported traded in Gibraltar and Barcelona in the week to 10 November.
Spot trading activity thinned afterwards, as participants reported muted marine biodiesel bunkering demand in the west Mediterranean.
The limited demand for the biodiesel blend was linked to factors influencing the underlying conventional bunker fuel and biofuel markets. Uncertainty and price volatility in the very low sulphur fuel oil (VLSFO) market weighed on buying interest, partly induced by the 22 November announcement from the Opec secretariat delaying the Opec+ ministerial meeting to today.
Market participants reported lacklustre regional VLSFO upstream demand in the Mediterranean throughout November. VLSFO imports into the west Mediterranean totalled 138,000t in October and November, lower than September's total of 176,000t - according to Vortexa data. The retail bunker VLSFO dob Gibraltar-Algeciras-Ceuta price has averaged $611/t in November so far, its lowest since July.
In the biodiesel market, spot trade of European benchmark assessment Ucome fob ARA range thinned on the back of lacklustre demand, with European used cooking oil (UCO) feedstock prices softening as a result of sustained soft market value for the end product. Argus assessed Ucome fob ARA range barges at an average of $1,241.17/t in November, a three-year low for the month.
Easing price levels and thinning demand in the biofuels market were mirrored in upstream cargo flows. UCO imports into the Mediterranean fell by over 58pc on the month in November, according to Vortexa data.
This follows an earlier downward trajectory in net UCO cargo flows. About 109,000t of UCO was imported into Spain in the third quarter of 2023 - including preliminary data for September - compared with just under 138,000t in the second quarter, according to GTT data. Spanish UCO exports, on the other hand, rose by about 9,000t to 83,000t on the quarter in the third quarter this year.
Market participants have reported increasing competition in spot trade negotiations among suppliers ahead of the implementation of EU ETS into the maritime industry from 2024.
Some participants added that shipowners that have already met their carbon intensity indicator targets this year are now looking to set up contracted supply for next year, reducing demand for spot trading.
By Hussein Al-Khalisy