[RE]fuel Market Price Commentary

11 May 2018

It was another week in which trading activity was light and both the buy side and the sell side showed little in the way of clear indications.

For Year 11, offers were again heard in the range of 19p/certificate, with bids scant, but most market sources anticipating they remained in the 18p to 18.5p/certificate.

With mineral diesel prices moving up again – prices on an Amsterdam-Rotterdam-Antwerp basis have risen 18% since early February – biodiesel premiums have kept pace, taking outright prices higher and affording headroom for theoretical values to expand into.

For UCOME, an increase in demand across much of Europe has seen values firming, although the premium for UCOME over FAME 0 has been compressed as oil prices and FAME 0 premiums have risen.

Market sources put the UCOME premium to FAME 0 spread at around $140/mt – enough still to deliver the highest UCOME price on a US dollar basis since at least the start of the year.

“For me, RTFC prices are set to move up... it has to be higher because you have demand for UCOME everywhere in Europe,” one market source said.

Against that backdrop, Year 11 certificates nudged modestly higher – rising a quarter of a penny to be assessed at 18.75p/certificate, with Year 10 moving in line to 13.25p/certificate.

Physical indications were particularly scant for Year 10, with market sources quoting a bid/offer range of 11p to 14p/certificate, but acknowledged the values were not backed by concrete trading levels.

Price Assessments 11 May 2018

p/cert. +/-
RTFCw Year 11 18.75 +0.25
RTFCc Year 11 18.75 +0.25
RTFC Year 10 13.25 +0.25
Spread to ULSD
Spread to ULSD
UCOME 1088.75 411.00 26.82
FAME 0 948.75 271.00 17.68
RME 949.75 272.00 17.75
ULSD 677.75
USD/GBP 0.7374
RTFC-RHI spread (waste based biomethane)*
p/kWh p/litre
RTFCw Year 11 2.13 7.86
* 3 pence/kWh RHI
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