BDI finally fell 5% today, trading below 1000, reflecting the market situation for essential dry bulk cargo. The Clean Tanker Index (BAIT) didn't fare better, down 2% and down 32.5% for the year. Despite this, ICE gasoil backwardation Jan/Apr (driving season) rose again to +$12.50 from +$1 on Dec 6. Spot activity for distillate was mixed, with lots of offers from Asian refiners across categories, including discounting jet fuel. We can expect this situation to continue into the new year as many large refiners in Korea, China, Russia, and India still have plenty of distillate to sell. The ULSD screen crack is still quite attractive at nearly $24/Brl. Meanwhile, the biodiesel spot market is quiet in the final week before the Christmas/Hanukkah holidays next week. Again, FAME0 did not trade while RME traded at $1253 flat price or +570 over ICE gasoil, reflecting a gross replacement margin of $110/mt, while UCOME traded at $1378/mt flat or +695 over ICE gasoil, reflecting a $188/mt gross margin. All margins in bio are still under pressure, including in the US, where including BTC and excluding RINs, RD screen crush still shows -1.40 c/gallon after the bean oil correction. D4 RINs still show 0.59 c/gal, meaning a credit of 0.94 c/gal. Still, I believe we will need to go lower on vegetable oils futures (my target 30c/lbs) as lower freight improves import values, and soybean oil remains the cheapest soft oil in Europe at $1045 or $96/mt below RSO and $125/mt below SFO, while palm oil is the richest oil, +$205 more expensive than soyoil. This is my last post for the year. Wishing you all Happy Holidays and my best wishes for 2025.
