Margins on biodiesel production have been mostly negative since mid-October this year, Fastmarkets heard on Friday November 22, which has caused production to slow.

“[Biodiesel] blending has been somewhat active, but not what I would consider normal for this time of year,” a blender told Fastmarkets. “In fact, I would say it is very much below normal.”

Margins have improved over the past few days, with the soybean oil/heating oil (BOHO) spread reaching its lowest level since October 14.

The BOHO spread is often used a measure of profitability in biodiesel and renewable diesel production. A falling BOHO indicates that production is becoming less expensive. Renewable identification number (RIN) prices tend to follow the BOHO spread’s movement.

But biodiesel production may not rebound with the falling BOHO this time, Fastmarkets has heard.

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