High feedstock cost continues squeezing European biofuel production margins

High feedstock cost continues squeezing European biofuel production margins

European biofuel feedstock prices remained broadly stable in the week to Thursday February 27, applying additional pressure on biofuel production margins, with the spread between used cooking oil (UCO) and used cooking oil methyl ester (UCOME) reaching $140 per tonne.

“Production margins are unhealthy; the market is simply oversupplied with the end product, demand is limited and feedstocks remain too expensive — not the best times for biofuels production in Europe,” a source told Fastmarkets.

Buying side price levels for UCO were reported in the range of €1,080-1,090 ($1,124-1,135) per tonne in North-West Europe (NWE), while offers were indicated at €1,210-1,215 per tonne DDP.

Higher demand for Chinese UCO was heard in Asia, with bulk shipment cargoes trading at $1,050 per tonne FOB China, sources said, while Indonesian UCO was offered at $970 per tonne FOB.

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