RINs prices saw out September on a steady note, with D4 biodiesel RINs trading around 48 cents/gal and D6 renewable fuel RINs around 35 cents/gal at the month’s end.
Prices for 2015 D4 15 RINs averaged 45.37 cents/gal in September after trading in a range between 39-49 cents/gal, down 30% MoM after an almost untrammeled slide through August into early September. Strong August RIN generation at well above the annualized rates needed to square mandated blending requirements kept the D4 market in freefall through mid-September with sliding heating oil and SME biodiesel prices compounding the downward pressure. Biodiesel has failed to keep pace with September’s heating oil price claw back from late August lows, with SME prices still at record lows.
EIA’s most recent US biodiesel production data painted a worrying summer picture for US producers, with July production stalling and month end stocks of 45mn gal gaining nearly 20% MoM and 25% YoY. Rising imports posed a particular problem for US producers over the summer, with biodiesel imports from Argentina up 180% MoM and Canadian imports up 150% MoM in July. Tightening Argentinian biodiesel supply has slowly strangled the arbitrage to the US amid rumored operational problems, with late September fixtures dwindling to just 1.2mn gal after a strong summer for northbound trade.