Price summary. Ethanol

Transcription

1 Argus US Issue Thursday 23 May 2013 Overview US ethanol moved weaker Thursday, particularly at the crucial Chicago pricing center, despite a pop in corn futures prices. The 2013 ethanol RINs were down 2.75c on the day, trading as low as 85c/RIN, as sellers entered the market in earnest. RINs were down Thursday as D4 and D6 RINs made up the bulk of the day s commerce. Meanwhile, the Argus CME RINs swap continued to garner market attention, with increased interest in the D63. B100 SME continued to see values rise Thursday as sellers in the Gulf Coast ratcheted up offers 3c from the previous day Brazilian ethanol moved sideways Thursday, with offers on FOB anhydrous coming down another $5 m³ from the day before. No transactions were confirmed by day s end. US ethanol moved weaker Thursday, particularly at the crucial Chicago pricing center, despite a pop in corn futures prices. The 2013 ethanol RINs were down 2.75c on the day, trading as low as 85c/RIN, as sellers entered the market in earnest. The July CBOT corn futures contract pushed 3.5c higher to trade 662c/bushel, as traders forecasted improved ethanol demand. The ethanol futures contract settled at 262.7c/USG, edging 1.9c lower in day-over-day comparison. In the New York Harbor, ethanol values continued to hover Price summary Price ± Chicago (Argo) New York Harbor fob Brazil anhydrous $/m Los Angeles low CI CBOT corn /bushel Price ± SME New York Harbor B SME Houston fob B SME Chicago fob B CBOT soybean oil /lb RINs /RIN Timing Low High ± Advanced biofuel Biofuel spreads ± crush spread $/bushel Heating oil/soybean oil spread LA ethanol NYH ethanol vs Buckeye Rbob LA USC/USG NYH vs Buckeye Rbob (Summer) USC/USG hh hhh Aug 22 Mar 23 Apr 22 May

2 Argus US Issue Thursday 23 May 2013 in the mid 270 s, with a June barge heard done at 274c/USG, down 1.5c from the previous day s assessment. Prompt Argo In-tank transfers traded down 4.5c, with a confirmed trade at 262c/USG for next week transfer. June transfers were talked closely with May, at a 1c backwardation. A volume shipping this week in the Chicago Rule 11 market was confirmed trading at 265c/USG, 0.25c above Wednesday s assessment. RINs RINs were down Thursday as D4 and D6 RINs made up the bulk of the day s commerce. Meanwhile, the Argus CME RINs swap continued to garner market attention, with increased interest in the D63. The release of April 2013 EPA RIN data showed a significant decrease in D5 credits production month over month, while D4 and D6 RINs generation was relatively stable. RIN values slid down throughout the day, from 89c/RIN down to 85c/RIN in the afternoon, bringing the day s midpoint down 2.75c/RIN from the previous assessment. Offers for June lots of D63 on the CME RINs swaps were abundant Thursday, hovering near 86c/RIN for most of the day. In the afternoon, 20 lots were confirmed done at 85c/RIN. RINs edged a couple cents lower for the day, trading at 98c and 99c for small volumes. Offers held at 99c for the majority of the afternoon, with buyers coming out at 95c and 98c as the day progressed. Market prices Low High ± Chicago Argo prompt Argo any May Rule 11 prompt New York Any May US Gulf coast/south Houston Tampa Atlanta Dallas Nebraska Union Pacific Burlington Northern US west coast Los Angeles low CI Los Angeles high CI Brazil fob anhydrous $/m fob anhydrous BRL/m 3 1, , fob hydrous $/m fob hydrous BRL/m 3 1, , cif anhydrous $/m cif anhydrous BRL/m 3 1, , See deals on page 4 forward curves Chicago, low-high New York, low-high B100 SME continued to see values rise Thursday as sellers in the Gulf Coast ratcheted up offers 3c from the previous day. Offers for Houston B99 RIN-less SME surfaced at HO 40c/ USG. Q4 barrels continue to be widely talked in most markets, Chicago ethanol vs Chicago Cbob hh Chicago vs Chicago Cbob USC/USG May Jun Jul Aug RINs /RIN Low High ± Cellulosic Advanced biofuel See deals on page 4 Page 2 of 6

3 Argus US Issue Thursday 23 May 2013 though small volumes of prompt material have surfaced in the market. The heating oil/soybean oil spread narrowed again Thursday to stand at 13.55c/USG as heating oil futures continued to shed value. The June Nymex heating oil contract settled at 286c/ USG, down 1.36c from the previous day. Soybean values spiked near midday, trading at a nine month high of c/bushel, and then ending the day at c/bushel, just 5.25c above Wednesday s settle. Bean oil, meanwhile, was little changed, up just 0.02c at 49.66c/lb at the end of the trading day. Brazil Brazilian ethanol moved sideways Thursday, with offers on FOB anhydrous coming down another $5 m³ from the day before. No transactions were confirmed by day s end. Offers for FOB Anhydrous EPA specification ethanol were heard at $700/m³; with bids falling $10/m³ at $680/m³ for cargos shipping in June. CIF cargos of Anhydrous EPA spec ethanol saw offers at $770/m³ for June shipments, with bids valued at $660/m³. Physical Chicago vs CBOT corn futures hh Physical Chicago vs CBOT corn futures USC/USG Houston B100 SME vs Nymex heating oil hhh Houston B100 SME vs Nymex Heating oil USC/USG B100 Timing Low-high diff Low-high price ± SME New York harbor Jun SME Houston fob Jun SME Chicago fob (rail) Jun Current month-to-date averages, May Averages Chicago (Argo) prompt New York harbor prompt Los Angeles low CI SME Houston fob B SME Chicago fob B California carbon allowances $/t Vintage Delivery Bid Ask Price ± 2013 Dec Dec Values in $/metric tonne California low-carbon fuel credits $/t Vintage Bid Ask Price ± Values in $/metric tonne; assessment updated weekly; assessment is as of 17 Futures Timing Settlement ± CBOT ethanol Jun Jul Aug Sep CBOT corn /bushel Jul Sep Dec Mar CBOT soybean oil /lb Jul Aug Sep Oct Other markets CBOT soybeans /bushel Jul CBOT soybean meal $/t Jul Nymex Rbob Jun Nymex Rbob crack spread $/bl Jul Nymex heating oil Jun Related markets Low High ± New York Rbob barge New York Cbob barge Houston Rbob Colonial Houston Cbob Colonial Los Angeles Carbob 84 month Houston ULSD Colonial Mont Belvieu natural gasoline Page 3 of 6

4 Argus US Issue Thursday 23 May 2013 News D5 RIN generation hits year low Production of advanced biofuel renewable identification numbers so-called D5 RINs was 43pc lower in April than in March at 28mn RINs generated. April 2013 D5 RIN generation was the lowest level seen since the prior-year period in April 2012, according to the latest release of the Environmental Protection Agency s (EPA) monthly RIN data. D5 prices are up nearly 12pc so far this month, as obligated parties and traders take stock of tighter supplies. Domestic D5 RINs were last seen traded during yesterday s session at 96c/USG. Despite the hefty slide in output, D5 generation levels stand 32pc above year ago levels. Production of renewable fuel D6 RINs, mainly generated by corn-based ethanol, rose 5pc last month when compared to March, making them little changed from the previous year s period. D6 RINs have posted higher output levels in each of the past three months, climbing 10pc in March. Traders remain bullish on RINs this year, with D6 prices rising 17pc in the month to date, as blend wall concerns support healthy buying interest. D6 RINs changed hands at between 85c-89c/USG over the course of today s session. Biomass-based D4 RINs production fell 9pc in April from March, but was up 21pc from the prior-year level. Market participants confirmed deals today at 98c/USG and 99c/USG for 2013 vintage D4 RINs. The Renewable Fuels Standard (RFS-2) requires blending of 16.55bn USG of biofuels during Obligated parties submit RINs to regulators to demonstrate compliance with individual renewable volume obligations. Advanced biodiesel plant planned in Colorado Bio Plant Technologies (BPT), operating as ClearEcos, signed an agreement this week with GHP USA to collaborate on building an advanced biodiesel plant in Colorado. The facility, to be located in Boulder, Colorado, would have an annual capacity of 11.5m USG roughly 750 b/d and convert used cooking oil into advanced biodiesel. ClearEcos has been operating in Boulder for five years, collecting used cooking oil. Together with our restaurant partners, we will create a cleaner environment and cleaner communities in Colorado, BPT chief Kurt Lange said. The usage of local restaurants grease to create biodiesel for our municipal fleets ensures that the economic and environmental benefits of our business stay in the region. deals done Market Price Volume 000 Arizona May USG Chicago Argo 26 May - 1 June bl Chicago Rule May USG New York Harbor June bl RINs deals done Market Price /RIN Volume 000 RINs ,000 Petrobras chief extols ethanol virtues Petrobras chief executive Maria das Gracas Foster yesterday called herself an absolute defender of ethanol, lauding investments in ethanol technology that she says have helped mitigate economic the shocks caused by volatility in gasoline prices. Speaking before Brazil s congress, Foster defended the state-controlled company s policy of smoothing out the ups and downs of international fuel prices to protect the economy, adding that ethanol plays an important role in that policy. Brazil s cane sector traditionally has blamed the government s fuel policy, which has held the gasoline price below international market prices since 2010, for making ethanol less competitive and squeezing mills margins. As a result, in the past several harvests, mills have favored the production of sugar over ethanol. The record 590mn t 2013/14 center-south cane crop that is currently being harvested will produce 18pc more ethanol than last year and the biofuel is expected to win back some of its lost market share from gasoline. Because of the poor output of ethanol over the past two seasons, gasoline has won back market share on the light vehicles market. In 2009, ethanol shared almost equal Page 4 of 6

5 Argus US Issue Thursday 23 May 2013 Biofuels market map NY less Chicago LA less Chicago Rbob: Rule 11 less NE New York Chicago Nebraska LA less NE Houston less Chicago : Los Angeles Rbob: NY less Santos LA less Santos Houston market share with gasoline, but the ethanol share has since fallen to just over 34pc. The bigger cane crop and a slump in sugar prices will now force mills to augment ethanol production. For the moment though, ethanol is only competitive with gasoline at the pump in Sao Paulo state, where tax benefits help reduce costs. Motors only use ethanol when the price is less than 70pc of the gasoline price. As the center-south harvest accelerates in the coming months, prices for ethanol are expected to fall in some other states in the region such as Goais, Mato Grosso do Sul, as well as Parana, Mato Grosso and Minas Gerais. The biofuel tends not to be competitive against gasoline in most states that do not produce the fuel because of the high transport and tax costs for getting the fuel to those markets. Sao Paulo, Brazil Expanded Latin American Coverage Argus has recently expanded its coverage of Latin American crude, refined products, ethanol and LPG markets as part of Argus Latin Markets. The improved service includes a comprehensive list of 40 price assessments for actively traded energy commodities as well as insightful market data and analysis on the rapidly changing global oil markets and trade flows. Contact us at moreinfo@argusmedia.com for more information. Page 5 of 6

6 Argus US Issue Thursday 23 May 2013 Methodology Argus US biofuels prices represent the market over the course of the entire trading day. Argus believes that a fair and representative price will include trade throughout the day. For biofuels in the US, Argus publishes the low and the high of deals done. In illiquid markets, Argus looks to assess the range within which product could have traded, based on bids and offers through the day, movements in similar grades, and a market consensus following extensive polling of participants. The Argus assessment is an intelligent range of trade not a mechanistic system. Price assessments in Argus US rely on a wide variety of sources for information, including discussion with refiners, marketers, importers, traders and brokers. Argus works to verify all deal prices, counterparties, and volumes. Argus values transparency, so we publish as much price, volume, and specification information as we discover. This allows you to cross check and verify the deals against the published prices. The details of our methodology are available at or by calling any Argus office. Argus Consulting Services Drawing on Argus extensive knowledge of energy markets, broad range of industry contracts and deep historical databases, our consultancy division provides clients with tailored analysis, detailed research and data to provide market inteliigence and competitive advantage. Contact us at info@argusmedia.com for more information. illuminating the markets Argus US is published by Argus Media Inc. Registered office Argus House, 175 St John St, London, EC1V 4LW Tel: Fax: sales@argusmedia.com ISSN: Copyright notice All rights reserved. All intellectual property rights in this publication and the information published herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this publication you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, ARGUS US ETHANOL, other ARGUS publication titles and ARGUS index names are trademarks of Argus Media Ltd. Visit for more information. Disclaimer The data and other information published herein (the Data ) are provided on an as is basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law. Publisher Adrian Binks Chief operating officer Neil Bradford CEO Americas Euan Craik Global compliance officer Jeffrey Amos Commercial manager Karen Johnson Editor in chief Ian Bourne Managing Editor, Global Cindy Galvin Managing Editor, Americas Jim Kennett Editor: David Ruisard Tel: houstonproducts@argusmedia.com Customer support and sales: support@argusmedia.com Technical support: technicalsupport@argusmedia.com Houston, US Tel: New York, US Tel: Washington DC, US Tel: London, UK Tel: Astana, Kazakhstan Tel: Beijing, China Tel: Dubai Tel: Moscow, Russia Tel: Rio de Janeiro, Brazil Tel: Singapore Tel: Tokyo, Japan Tel: Petroleum illuminating the markets