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Asia Biodiesel Europe

FAME/RME spreads at widest since June as China woes weigh on palm

ARA biodiesel spot prices showed a belated reaction to the longer-running widening between EU and imported feedstock price spreads, with FAME sliding away from better supported RME prices to blow the intergrade spread back to $40/t. The spread was last this wide at the beginning of June for a lone session before quickly narrowing back to a tight sub-$20/t range for the best part of July and August. Palm oil opens this morning drifting further below EU rapeseed oil, with the spread pricing just shy of $340/t.

China’s ongoing stockmarket dramas are weighing particularly hard on Asian palm oil given China’s long-standing importance as a key demand sink for the rapid growth in Indonesian and Malaysian palm oil output.

Chinese offtake has accounted for just 13% of overall Malaysian export shipments so far this month, down from a May high of 24% and relative to a 21% market share in July during which the Shanghai Composite index consolidated 21% losses from June highs. The index has slid another 20% since the end of July.

 

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