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Americas Biodiesel

Europe ditches provisional biodiesel duties on Argentina

The European Commission will not impose provisional duties on Argentinian biodiesel imports while it continues with its anti-subsidy investigation into the trade, the Commission has told EU biodiesel stakeholders. The decision has surprised European producers who have suffered through months of poor margins and earnings (see below) amid an obvious inflow of imported material in size, triggering immediate promises of stepped up lobbying to persuade Brussels to change its mind on provisional duties, paced to existing investigation timelines. The European Commission still has until February to impose final duties under the investigation started in January 2018, with the possibility of a change of heart on provisional and retroactive duties still seen as a possibility.

Despite the ditching of a trade barrier which was widely expected to be in place by next month, winter biodiesel flat prices have responded wholeheartedly to the uplift provided by a surging gasoil screen, with stronger vegetable oils supplementing the upward impetus in price. With rapeseed oil so far lagging the stronger gains seen in US soybean oil, European producers have been enjoying an extra RME margin windfall into the bargain. FAME premiums to gasoil have been the main victim, dropping nearly $20/t a week for Q4.

After battling cheap imports through much of this year, European producers have been enjoying a collapse in shipments of competing refined product. Even while the market was awaiting an update from the European Commission on its progress towards anti-subsidy against Argentina, surging Chicago bean oil prices have slammed the Argentinian biodiesel export arbitrage door to Europe shut on paper through the end of this year. Retroactive duties promised to be merely be another nail in Argentina’s biodiesel coffin.

MS 27/09/2018

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