Your Biofuels Supplier

Solfuels is here to assist you with your Biofuels requirements. We have an in-depth knowledge of the biofuels industry and particularly Biodiesel across geographies and feedstocks. We also undertake production agreements to satisfy the needs of our customers and for this purpose can guarantee continuous flows of our products. We differentiate ourselves from other traders by providing our customers and partners a high level of service, transparency and a global scope. This includes intelligence on Biofuels movement worldwide, risk management strategies and regulatory insights.










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Wed 7Nov2018: ICE Gasoil jumps to $699 as Nov/Apr backwardation explodes to $29.25/mt. HO cracks also exploded on the higher side to $32.23/Brl while gasoline cracks were unchanged. EU situation on RME has gone out of control with spot premium now at +$662/mt while Q4 printing +585. FAME premium still showing no signs of follow through with Q1 at +150 and Q2 at +165. Argentinian made a strong presentation to EU commission on taking any additional measures on Biodiesel imports after last Sept de-registration – the commission is supposed to make a final ruling by end of Nov. On the US side, margin improved slightly together with HO values as Bean oil having a hard time to recover – Brazil is now considering an export tax regime like Argentina. OPEC now organising a timely meeting just after mid-terms to realign production – it would seem that coast is now clear for Brent to return to $80.

Mon 5Nov2018: Gasoil sitting now on 200DMA @682 ahead of US midterms while Nov to April backwardation nearing $18/MT while RSI in low 50’s. Although Gasoline crack well below $10/brl, we note that Heating Oil crack remains at $29/brl enabling 3:2:1 to still print $14.90/Brl. US Biodiesel margins have improved only slightly thanks to improved RINs value at 36 cpg while BOHO has narrowed significantly with the engineered big drop in flat price of diesel ahead of elections in US. BOGO has improved at least $13/MT while EU premium, particularly in RME, show improvement beyond such consideration now trading spot close to +600 while Q4 still showing values of +485. FAME on the other hand is trading at 435 discount to RME in the spot and 325 discount for Q4. More meaningful is that the back of the curve on FAME is showing very depressed value for q1 at +150 which does not make any sense considering that even POGO has improved at least $50/MT in 2 weeks. On the FOREX side CNH has remained stable @6.91 despite the very acrimonious trade discussions. INR has stabilised after the big drop in crude these last 2 weeks before US elections. We can expect that post elections and Iran sanctions, there will be little to hold down crude prices.

Wed 24Oct2018: Gasoil breaks lower in line with Crude down to $695/Mt with backwardation to Nov/Apr widening again to $15.50/mt. RSI now back to a possible bounce levels at 55.85 but unlike Crude, gasoil has no broken the 200dma level. Crack margins for HO still at record high. US Biodiesel margins go even more negative despite improved BOHO levels but weak Biodiesel RINs value @32cpg still being pressured by the Ethanol RINs. IN EU RED RME goes to +505 in the spot market while Q4 offered at +435ish. RED FAME trading at 255 discount in Q4 while for Q1 2019, the spread is only 140 discount. Precipitation forecast for Europe looks a bit better for central and SouthEast Europe to improve Danube navigation but still rather dry to upper Rhineland. Brazil is bracing for decisive elections this coming week-end closing a bit weaker at 3.73R/$. China situation remains pretty much frozen at 6.94 while INR a bit improved at 73.36.

  HO Crack:  

Mon 22Oct2018: Gasoil moves a bit higher at $716 as backwardation to Apr19 widens to +$14/mt. Heat crack margin also moves higher to $28.45 telling us something is up as Nov WTI futures expires signalling end of a weakening trend. US Biodiesel still marred by poor margins despite increase in HO but D4 RINs following depressed state of ethanol RINs as impact of E15 weighs on market. 15 days to midterms that will set the tone for RVO (Renewable Volume Obligations) by end of Nov. In EU, situation with Rhine river causing logistical nightmare for supply chain of all refined products. RED RME spot has gone to +500 while Q4 offered at +405 and spread over RED FAME now 240/mt. Crop progress shows that we just went over the hump on Soya with 53% harvested; now storage for the remainder of this crop will be critical and would expect continued pressure on basis and then futures. BOGO ended today at -69/mt while POGO at -$161 and expect continued pressure on both despite exceptional arbitrage into EU. On the forex front, we are probably not too fare for CNH to reach 7 while Indian Rupee still vulnerable to Crude prices. In South America, the Brazilian Real is defying all expectations of emerging markets with a strong rebound to 3.67 ahead of elections next week end.

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