Premiums for biodiesel produced from oilseed rape remain supported on a cocktail of currency, feedstock strength and fundamentals market sources said Thursday.
The premium, versus the front month ICE gasoil contract, was assessed at $573.25/mt Thursday, just 50 cents below the highest premium assessed by Platts since the assessment was launched in April 2014.
Falling gasoil values, strong feedstock prices, the euro's performance versus the US dollar on international currency markets and steady demand in the face of few sellers have all provided support, according to market sources.
"The replacement value is higher, and there's only one seller able to sell," one source said of the current market.
Gasoil prices have remained under pressure as the oil complex has slumped lower, while the euro, having improved marginally from recent lows, has slid back against the US dollar.
Mostly the main driver has been feedstock costs, which have seen rapeseed values nudging steadily higher as the euro has weakened and as expectations gather of a tighter supply picture through 2016.
Since December 17, rapeseed contract prices on the Euronext exchange have risen from Eur367.50/mt, to Eur374.75/cu m, according to Platts data.
Wednesday saw the FOB ARA RED RME premium hit its highest level since Platts began assessing on April 1, 2014, when it was assessed at $573.75/mt over the front month ICE gasoil contract.
