US Biodiesel Prices Surge in November 2024

The prices of Biodiesel witnessed a surge in the USA market in the week ending on 22^nd November 2024. The Biodiesel prices were observed to show a bullish market trend after remaining stable for the past few weeks due to various reasons affecting the demand and supply dynamics of Biodiesel in the market.

According to the analysts at ChemAnalyst, the prices of Biodiesel UCO CFR Houston USA were assessed at USD 1545/MT by the end of 22nd November 2024. The prices witnessed a surge of 1.3% as compared to the previous week. The increase in the prices was attributed to the decreased availability of feedstock Soyabean in the domestic market. Moreover, the continuous increase in the feedstock Soyabean prices since October has affected the production cost during this timeframe. In the feedstock market, net sales of Soyabean oil witnessed a significant surge of 33% as compared to the previous week but declined by 48% from the prior 4-week average. The increase in demand for soyabean oil pushed the prices in the market. The demand for soyabean oil continued to increase while the supply was moderate leading to increased prices in the market which in turn impacted the prices of Biodiesel.

Meanwhile, potentially unfavorable government policies for the Biofuel or Biodiesel manufacturers affected the market sentiments toward bullishness. Recently, the Senate witnessed opposition to the drive by US lawmakers to extend numerous biofuel incentives. The tax credits are about to expire in December due to which the biofuel manufacturers are currently under pressure. The expiration of the tax credits could increase the blending margins to mix biofuels with conventional fuels. As a ripple effect, the market sentiments have dwindled due to the expected surge in manufacturing costs. The push to extend the incentives is supported by farm-state lawmakers deeming these incentives important for the agricultural economies especially related to soyabean production which will have a drastic impact on the production of feedstock that is soyabean oil. However, with other priorities such as government funding, federal debt, etc, biofuel or Biodiesel incentives may not remain a priority disappointing these lawmakers and their constituents.

Looking further, the future market of Biodiesel is expected to show uncertainty due to resistance to extending tax credits and fluctuating demand and supply dynamics in the market. The industry’s future and Biodiesel prices may be dependent on how the incoming Congress handles the tax policy and whether those policies align with the interests of biofuel producers.