Argus Americas Biofuels

Transcription

1 Incorporating Argus US Ethanol Overview US ethanol markets shifted downward in Wednesday s trading session following the release of the USDA's crop progress report. The 215 vintage biomass-based diesel RINs climbed.75 / RIN gaining value for a sixth straight session, while renewable ethanol credits of the same vintage halted a five-day rally. US biodiesel differentials were mostly up in Wednesday s trade, alongside continuing gains recorded in the D4 RIN market and stabilizing production margins. Americas ethanol prices Price summary Ethanol ± $/m³ ± Chicago (Argo) New York Harbor fob Brazil anhydrous Los Angeles low CI Cbot ethanol RINs Timing Price ± Less 214 Renewable fuel (ethanol) Biomass-based diesel Advanced biofuel RVO Chicago (Argo) $/m ³ Los Angeles low CI $/m ³ cif Brazil $/m ³ fob Brazil anhydrous $/m ³ New York Harbor $/m ³ Houston $/m ³ Biodiesel Price ± SME New York Harbor B SME Houston fob B SME Chicago fob B SME fob Paranagua $/t SME fob Argentina upriver $/t Cbot soybean oil /lb Biofuel spreads Spread ± Ethanol crush spread $/bushel Heating oil/soybean oil spread Houston less Chicago ethanol New York Harbor less Chicago ethanol Los Angeles less Chicago ethanol Los Angeles less Nebraska ethanol Rule 11 less Nebraska ethanol Contents Ethanol 2 RINs 4 California carbon 5 Biodiesel 5 Latest news 7 Key California carbon prices Vintage Price ± Credits $/t California carbon allowances (CCA) Low-carbon fuel standard (LCFS) Price per gallon CCA price for regular Carbob LCFS price for regular Carbob Copyright 215 Argus Media Inc

2 Ethanol Ethanol US US ethanol markets shifted downward in Wednesday s trading session following the release of the US Department of Agriculture s latest Crop Progress Report, which showed this year s corn harvest at 42pc in the week ended 11 October, up 15pc from the previous week. At Chicago s Argo in-tank transfer hub, prompt availabilities were heard traded multiple times at 154 early in the day, with discussion sliding to /154 by midday. Trades Announcement Argus completes and extends annual Iosco assurance review Argus has completed its fourth external assurance review of its price benchmarks, extending the scope of the process to cover petrochemicals and fertilizers for the first time, as well as again covering crude, products, biofuels, thermal coal, coking coal, natural gas and biomass benchmarks. The review was carried out by professional services firm PwC. Annual independent, external reviews of oil benchmarks are required by international regulatory group Iosco s Principles for Oil Price Reporting Agencies, and Iosco encourages extension of the reviews to non-oil benchmarks. For more information and to download the review visit our website: Ethanol deals done Market Timing Price Volume USG Chicago Argo Oct Oct Oct Ethanol Low High ± Chicago Argo prompt Argo any Oct Rule 11 prompt New York Any Oct US Gulf coast/south Houston Tampa Atlanta Dallas Nebraska Union Pacific Burlington Northern US west coast Los Angeles low CI Brazil fob anhydrous $/m³ fob anhydrous BRL/m³ 1, , fob hydrous $/m³ fob hydrous BRL/m³ 1, , cif anhydrous $/m³ cif anhydrous BRL/m³ 1, , fob Santos industrial grade* $/m³ fob Santos industrial grade* BRL/m³ 1, , Asia cfr Asia South Korea B grade $/m³ *assessment is as of 9 Oct Ethanol forward curves Chicago, low-high New York, low-high Oct Nov Dec Jan Related markets Low High ± Spot New York Rbob barge New York Cbob barge Houston Rbob Colonial Houston Cbob Colonial Los Angeles Carbob 84 month Mont Belvieu natural gasoline Settlement Nymex Rbob settlement, Nov Nymex Rbob crack spread, Nov $/bl Current month-to-date averages, Oct Averages Chicago (Argo) prompt New York Harbor prompt Los Angeles low CI fob Brazil anhydrous $/m³ cif Brazil anhydrous $/m³ Copyright 215 Argus Media Inc Page 2 of 9

3 Argus market map: Ethanol Los Angeles less Chicago Ethanol: Rule 11 less Nebraska Ethanol: New York less Chicago Ethanol: +9.3 Rbob: Freight $/t USGC - Itaqui Santos - NYH Nebraska Chicago New York Los Angeles Los Angeles less Nebraska Ethanol: Houston Houston less Chicago Ethanol: +7.5 Rbob: New York less Santos Ethanol: Itaqui Los Angeles less Santos Ethanol: Houston less Santos Ethanol: Sao Paulo went through between and in the second half of the session. In the New York Harbor, October barges were heard changing hands at in morning commerce. Bid and offer interest emerged at 161 and 163.5, respectively, but the discussion failed to spur further trade. The Rule 11 rail market slid.38 in a thin session. Discussion formed at /152 near the end of trade, with no deals recorded on the day. The west coast rail market moved flat in daily comparison, holding firm at Arizona railcars with this week shipment were talked between 167 and 169 early in the day, though buyers and sellers were unable to come together. Brazil Brazilian anhydrous and industrial ethanol continued to post gains on the export front, bolstered by firm domestic demand. In the port of Santos, November shipments of anhydrous ethanol were heard offered for $55/m³, up $5/m³ in daily comparison. US demand remained thin as players continued to NYH ethanol vs Chicago ethanol Nebraska UPRR vs LA low CI ethanol LA = Copyright 215 Argus Media Inc Page 3 of 9

4 prefer cheaper local product. Korean B-grade ethanol climbed $7/m³ higher to $ / m³ in daily comparison, while discussion for hydrous fuel ethanol failed to pick up, leaving fob Santos product unchanged in the $-438/m³ range. Imported corn-based ethanol shed $2/m³ to $53/m³ for offers of delivered cif Brazil cargoes amid limited appetite in the Northeastern part of the country. RINs RINs The 215 vintage biomass-based diesel RINs climbed.75 / RIN Wednesday, gaining value for a sixth straight session, while renewable ethanol credits of the same vintage halted a fiveday rally. Current year ethanol RINs gave back.13 on the day, though discussion levels were little changed from the previous session. Bids fluctuated between and 35.25, while offer interest held between 35.5 and 36. Deals were recorded at 35.25, 35.5, and Concurrent biodiesel credits were talked between 48.5 and 49 to start the session, with trades heard done at those levels. Discussion climbed to 49.5 /51 near midday, with another deal going through at 5. The B15/E15 spread widened.88 to Bid interest for the 215 vintage advanced biofuel RINs came through at 47.5 and later at 48, but failed to attract offers. The costs of compliance as measured by Argus Renewable Volume Obligation rose.1 to RINs Low High ± Renewable fuel (ethanol) Biomass-based diesel Cellulosic biofuel Advanced biofuel Renewable Volume Obligation (RVO) RIN spreads Today ± Prior day 5-day avg Category spreads, 214 Biodiesel D4-ethanol D Biodiesel D4-advanced biofuel D Advanced biofuel D5-ethanol D Category spreads, 215 Biodiesel D4-ethanol D Biodiesel D4-advanced biofuel D Advanced biofuel D5-ethanol D Vintage spreads, Biodiesel D Advanced biofuel D Ethanol D Biodiesel RINs current year 1 RINs deals done Market Timing Price Volume RINs Biodiesel Ethanol Jun Jul 15 1 Sep Oct 15 Copyright 215 Argus Media Inc Page 4 of 9

5 California carbon California carbon California Low-Carbon Fuel Standard credits dipped to $8/ metric tonne as offers chased bids lower but failed to generate trades. California Carbon Allowance (CCA) prices were flat, with only a handful of trades taking place. The vast majority of the day's volume went in forward vintage contracts, with 216s trading at $12.8/t for delivery later this month. A 1mn t spread trade between December 215 and 216 delivery of vintage 217 CCAs had the near-term leg go at $12.84/t and the far leg at $13.21/t. Biodiesel Biodiesel US US biodiesel differentials were mostly up in Wednesday s trade, alongside continuing gains recorded in the D4 RIN market and stabilizing production margins. In the SME markets, fob Indiana availabilities with October timing were talked between +65 and +7 to the November ULSD contract, lowering the Chicago B1 premiums a penny. Discussion for fob Kentucky with November delivery emerged at Nymex +7 and +8. New York Harbor volumes with Q1 timing were talked between + and +6 to the screen. A trade for October- November delivered California was heard done yesterday at Nymex -31, equating to a value of with RINs. The November ULSD contract added 1.25 today, climbing to , while October soybean oil futures settled at /lb, up.17 from yesterday s settle. The heating oil/ soybean oil (HOBO) spread was mostly unchanged in daily comparison, weakening.3 to measure at Biomass-based diesel RINs continued to climb in Wednesday s commerce. Discussion surfaced at 48.5 /49.5 early in the day, before picking up to 49.5 /51 by midday. Trades were heard done at 48.5, 49, with another recorded at 5 / RIN. The 215 vintage ethanol RINs traded between and 35.75, losing.13 from yesterday s levels. California carbon allowances (CCA) $/t Vintage Delivery Bid Ask Price ± 215 Dec Dec Dec CCA volume-weighted averages $/t Vintage Delivery Low High VWA MTD 215 Dec Vintage Delivery Trades MTD Volume MTD 215 Dec , 454, CCA price for gasoline, diesel Winter 14 Oct ± Summer 14 Oct ± Sep ± index Regular Carbob Midgrade Carbob Premium Carbob Distillate ULSD CO2 California carbon offsets, 9 Oct $/t Bid Ask Price ± Seller-guaranteed year invalidation California low-carbon fuel standard (LCFS) credits $/t Vintage Bid Ask Price ± VWA Trades Volume MTD , 8.48 Sep index 66.5 California LCFS cost for gasoline, diesel Fuel Price ± Carbob Ultra low-sulfur diesel LCFS premium per carbon intensity point Avg Price ± Ethanol Biodiesel Argentina In Argentina, export differentials adjusted to marginally higher benchmark values in an active session on the soybean oil market. A total of 8,t was heard traded at CBOT +1.8 /lb, down.1 /lb from yesterday s levels. The drop in export premiums countered a.17 /lb rise in October CBOT contracts in Chicago. An additional 3,t was heard traded for December delivery, also at CBOT +1.8 /lb. A 3,t fixture was reported closed at a -.8 /lb discount to Chicago levels, up.1 /lb in daily comparison. Marginal gains for feedstocks filtered into the biodiesel market, prompting non-epa product to tick $2/t higher to $634/t. Copyright 215 Argus Media Inc Page 5 of 9

6 Assessment rationale Assessment rationale A validated trade done in the Argo prompt timing period done in afternoon commerce was used to set the lower end of the range for the day's Argus prompt Argo assessment, while a heard trade at 154 during morning commerce was used to set the upper end of the range for the day's assessment. A trade for October barges heard done at in morning commerce was used to set the upper end of the range for the day's Argus New York barges assessment, while a bid/ offer midpoint of from afternoon commerce was used to set the lower end of the range for the day's assessment. In the absence of trades for current year D5 advanced biofuel RINs, a bid of 47.5 was used to set the lower end of the range for the day's assessment, while available participants indicated that value held at 48.75, setting the upper end of the range for the day's assessment. In the absence of trades, bids, or offers for prior year D5 advanced biofuel RINs, available participants indicated that the spread to current year advanced biofuel RINs held at -4 / RIN, setting the range for the day's assessment. In the absence of trades, bids, or offers for the 213 vintage year D5 advanced biofuel RINs, available participants indicated that the spread to the 213 vintage ethanol RINs held at flat, setting the range for the day's assessment. A current year D4 biomass-based diesel RIN trade meeting the Argus minimum volume requirement of 25, RINs was used to set the upper end of the range for the day's assessment, while a heard trade at 48.5 was used to set the lower end of the range for the day's assessment. In the absence of trades, bids, or offers for prior year D4 biomass-based diesel RINs, available participants indicated that the spread to current year biodiesel RINs held at / RIN, setting the range for the day's assessment. In the absence of trades, bids, or offers for the 213 vintage year D4 biomass-based diesel RINs, available participants indicated that value held unchanged on the day, setting the range for the day's assessment. Current year D6 ethanol RIN trades meeting the Argus minimum volume requirement of 5, RINs were used to set the range for the day's assessment. In the absence of trades, bids, or offers for prior year D6 ethanol RINs, the spread to current year ethanol RINs was held at +.63, setting the midpoint for the day's assessment. In the absence of trades, bids, or offers for the 213 vintage year D6 ethanol RINs, the spread to current year ethanol Biodiesel Timing Low/high diff Low-high price ± US B1 SME NYH Nov +64./ SME Houston fob Nov +66./ SME Chicago rail Nov +75./ Latin America fob upriver SME Argentina $/t SME fob Paranagua* $/t SME fob Paranagua* BRL/t 2, , *assessment is as of 9 Oct Related markets Price ± US Cbot soybean settlement, Nov /bushel Cbot soybean meal settlement, Oct $/t Nymex heating oil settlement, Nov Houston ULSD Colonial Latin America Soybean oil Argentina diff to Cbot /lb +1.7/ Soybean oil fob Paranagua* $/t 631./ Soybean oil cif Sao Paulo with 12% ICMS* BRL/t 2,68./2, Methanol cif Paranagua* $/t 418./434.. Glycerine cif China* $/t 22./23.. Beef tallow cif Sao Paulo with 12% ICMS* BRL/t 2,1./2, *assessment is as of 9 Oct Current month-to-date averages, Oct Averages SME Houston fob B SME Chicago fob B SME fob Paranagua $/t SME fob Argentina upriver $/t Brazil ex-mill biodiesel prices per region Sep-Oct ± Jul-Aug Sep-Oct ± Jul-Aug BRL/m³ BRL/m³ $/m³ $/m³ North 2, Northeast 2, Centre-West 2, Southeast 2, South 2, $/m³ values are calculated considering Thursday s exchange rate Data last updated on 28 Aug ANP data RINs was held at flat, setting the range for the day's assessment. In the absence of trades, bids and offers for Houston B1 SME, available participants indicated that value increased 2 / Copyright 215 Argus Media Inc Page 6 of 9

7 Argus market map: Biodiesel Chicago New York less Chicago $/t Rotterdam Houston less Chicago $/t Houston New York New York less Argentina $/t Paranagua less Rotterdam $/t Houston less Argentina $/t Argentina less Rotterdam $/t Freight $/t Paranagua Paranagua - Rotterdam Argentina - New York Harbor Argentina - US Gulf coast Rosario USG in today's session. As such, the Houston B1 SME premiums were raised 2 to between Nymex +66 and +76 / USG. Latest news Brazil ethanol imports decline to a trickle Brazil imported a mere 5,596 liters (35 bl) of ethanol in September, a fraction of the 13.24mn l imported in September 214 as the depreciation of the Brazilian real and recent tax changes priced importers out of the market. In the first nine months of 215, Brazil imported 441.2mn l of ethanol, up by 14.5pc over the same period of 214, according to preliminary data from the trade ministry. The US was the largest supplier, exporting over 419mn l to Brazil in the nine-month period. New Brazilian legislation enacted on 23 June that increased taxes on imported ethanol to 11.75pc also weighed on imports. The Brazilian real has lost over 38pc of its value to the dollar over the past 12 months. Houston B1 SME vs Nymex heating oil Biodiesel RINs vs advanced (current year) HO = 5 4 Advanced RIN = Aug Aug Sep Oct 15 Copyright 215 Argus Media Inc Page 7 of 9

8 Argus US Refined Products Forward Curves Argus US Refined Products Forward Curves reflect real commodity market activity, free from distortion and representative of fair market values. For more information, please contact us at Futures CBOT ethanol CBOT corn /bushel CBOT soybean oil /lb Timing Settlement ± Nov Dec Jan Feb Dec Mar May Jul Oct Dec Jan Mar illuminating the markets Chicago ethanol vs Nymex Rbob Rbob = NYH ethanol vs Nymex RBOB Rbob = Gulf coast ethanol vs Colonial Cbob 5 Cbob = Copyright 215 Argus Media Inc Page 8 of 9

9 The most up-to-date Argus Americas Biofuels Report Methodology and Specifications guide is available on Argus Americas Biofuels Argus Assessment Rationale Database For prices used in financial benchmarks, Argus publishes daily explanations of the assessment rationale with supporting data. This information is available to permissioned subscribers and other stakeholders. Subscribers to this report via Argus Direct or MyArgus may access the database here. Other subscribers may request access here or contact us by at Argus Americas Biofuels Methodology Argus uses a precise and transparent methodology to assess prices in all the markets it covers. The latest version of the Argus Americas Biofuels Methodology can be found at: Last Updated: May 214 For a hard copy, please info@ argusmedia.com, but please note that methodogies are updated frequently and for the latest version, you should visit the internet site. MethodoLogy and specifications guide argus americas BiofUeLs MethodoLogy Contents: Methodology rationale 2 Definition of trading day 2 Survey process 2 Market data usage 2 Verification of transaction data 3 Primary tests applied by reporters 3 Transaction tests 3 Transparency and confidentiality 3 Basis differentials and absolute prices 3 Swaps and forwards markets 4 Publications and price data 4 Swaps and forwards markets 4 Publications and price data 4 Corrections to assessments 4 Ethics and compliance 4 Consistency in the assessment process 4 Review of methodology 4 Changes to methodology 4 Updates to methodology 5 Argus Americas Biofuels 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 Copyright 215 Argus Media Inc. All rights reserved. All intellectual property rights in this publication and the information published herein are the exclusive property of Argus 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 Americas biofuels, 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 executive Neil Bradford CEO Americas Euan Craik Global compliance officer Jeffrey Amos Commercial manager Karen Johnson Editor in chief Ian Bourne Managing editor Jim Kennett Editor Zander Capozzola Tel: houstonproducts@argusmedia.com Customer support and sales Technical queries technicalsupport@argusmedia.com All other queries support@argusmedia.com Houston, US Tel: New York. US Tel: Washington DC, US Tel: London, UK Tel: Astana, Kazakhstan Tel: Beijing Tel: Dubai Tel: Moscow, Russia Tel: Rio de Janeiro, Brazil Tel: Singapore Tel: Tokyo, Japan Tel: Petroleum illuminating the markets Issue Ref: 14623