4 - 5 November 2008

The Argus Biofuels Trading Congress 2008

Confirmed speakers include:

The Renaissance Chancery Court Hotel
London, UK
4 - 5 November 2008

The Argus Biofuels Trading Congress 2008 – Europe is back for its second year to repeat its launch success and give you exclusive insight into current trading behaviour, prices, markets and future development.

Controversy is raging about the biofuels market – negative press is damaging the image of biofuels – is the industry getting nervous? 

The massively increased biodiesel production and consumption in Europe and the heavily subsidised ethanol production in the US as well as the globally rising demand for energy have made biofuels a lucrative market for oil companies, producers, traders, agri businesses, asset and fund managers, investment banks and index providers.  The EU has set the legislative framework and national governments have supported the industry with subsidies and tax incentives to reach the target of 5.75pc market share by 2010. Aiming at a high level of biofuels production self sufficiency, the European biofuels industry was looking at a bright future. In a nutshell, the sector had been set for long term growth!

So…………..what happened?

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Argus Biofuels

Below is an extract from the daily Argus Biofuels report. Find out price assesments and details of trading activity in Europe, Asia and the US. The daily report also includes in-depth commentary on the biodiesel market.

Slumping gasoil hits biodiesel
Steep losses in the crude oil and gasoil futures markets undermined levels in the biodiesel market, as prompt ethanol values held steady.

Discussion was subdued through much of the day amid a US public holiday, with crude oil volatility also dampening trading activity.

FAME +5 was the only grade heard trading, with a September parcel changing hands in Rotterdam at $1,260/t. ARA prompt buying interest was shown at $1,295/t before the worst of the gasoil losses.

FAME zero indications were in short supply, with September bid ask spreads remaining $40/t apart from September dates at $1,330/t against $1,370/t and the market lightly backwardated along the curve. The forward market for SME was indicated better supported, with US Gulf buying interest for the fourth quarter shown at $1,210/t compared to a T1 cif ARA offer at $1,270/t. In the ARA market for PME meanwhile dealers reported offers from $1,175/t down to $1,160/t, again reflecting levels before the main losses on the futures screen.

The curve in physical RME was reported flat through to the second quarter of 2009 from a September bid ask spread of $1,530/t against $1,570/t.

Ethanol discussion was sparse, with dealers reporting offers in the T1 market from the upper-$600s/m³ into the low- $700s/m³ meeting with little visible buying interest. Near term value was seen remaining close to Friday’s $679/m³ traded level. The European market remains well supported in the absence of a workable Brazil to Europe arbitrage as Brazilian domestic prices remain strong. The arbitrage was reported to have opened briefly in the last week of August.

Asian palm biodiesel prices were kept unchanged, with buyers refusing to budge from previous price ideas. Feedstock palm oil did not trade due to a Malaysian public holiday.

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