Persistent volatility drives consistent uncertainty for renewalbe diesel and biodiesel producers. With increased regulatory action and production growth on the horizon, alongside mounting geopolitcal tensions, stakeholders need a weekly insight to their operational costs and returns.
What happened?
US renewable diesel margins strengthened across all feedstocks over the prior week, January 16 through January 20. Nymex ULSD strength offset headwinds from the credit markets and modestly higher feedstock costs. Renewable diesel margins are sitting at the highest levels since late December 2022.
Used cooking oil is the highest returning feedstock.
Biodiesel margins rose 10% week-over-week driven by higher Nymex ULSD prices and relatively stagnant soybean oil markets.
Substantial palm oil imports to the US Gulf Coast throughout November indicate that palm-based renewable diesel production picked up materially in the last two months of the year. Additional palm-oil imports for late January suggest continued runs.
Traders noted a California-based SAF facility is facing operational issues this month.
A Gulf coast-based producer is slated to start maintenance next month yet the extent of the work to be conducted remains unclear.
