US biodiesel production stalled in July, ending an otherwise uninterrupted run of growth since the start of the year. July output was down around 1mn gal MoM to 121mn gal, leaving the seven month 2015 production total at 594mn gal, sharply down more than 12% on the same time a year ago.
The drop in US output coincided with a hike in biodiesel imports into the US in July as RIN generating biodiesel surged northwards from Argentina from May onwards. DoC data puts July 2015 imports at more than 123,000t, nearly matching the 124,000t reported shipped into the US in March, although still down on the 130,500t shipped to the US in July 2014 from overseas origins. US simple producer margins also deteriorated significantly in July, pushing into the red from levels nearer breakeven earlier in the year before any tax credit considerations. Weaker prices for both RINs and heating oil meanwhile dented blender margins in July, depressing biodiesel supply chain margins.
July D4 biodiesel RIN generation meanwhile was up nearly 9% MoM at 294mn RINs, equivalent to 196mn gal of physical production given the 1.5 multiplier awarded to each gallon of biodiesel manufactured under the D4 category. July import volumes could have generated up to 55mn D4 RINs.
Soybean oil saw its contribution to US biodiesel output as a feedstock fall by 6% MoM after contributing strong MoM growth to US producers since the start of the year. Canola oil and corn oil were the biggest gainers in the US feedstock mix, with their share of the nation’s biodiesel inputs both rising around 35% MoM.