By Chen Aizhu
SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are looking for brand-new outlets in Asia for their exports and exploring producing other biofuels as supply to the European Union, their most significant buyer, dries up ahead of anti-dumping tariffs, biofuel executives and analysts said.
The EU will enforce provisional anti-dumping responsibilities of between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 companies consisting of leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export service that was worth $2.3 billion last year.
Some bigger producers are considering the marine fuel market in China and Singapore, the world's top marine fuel hub, as they look for to balance out currently falling biodiesel exports to the EU, biofuel executives stated.
Exports to the bloc have actually fallen sharply considering that mid-2023 amidst investigations. Volumes in the very first 6 months of this year plunged 51% from a year earlier to 567,440 loads, Chinese customizeds information revealed.
June deliveries diminished to simply over 50,000 lots, the most affordable since mid-2019, according to customizeds data.
At their peak, exports to the EU reached a record 1.8 million lots in 2023, representing 90% of all Chinese biodiesel exports that year. The Netherlands was the leading importer in 2023, soaking in 84% of China's biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.
Chinese manufacturers of biodiesel have delighted in fat revenues in the last few years, taking advantage of the EU's green energy policy that grants aids to business that are using biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.
Much of China's biodiesel manufacturers are privately-run small plants employing ratings of workers processing waste oil collected from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather products.
However, the boom was short-lived. The EU started in August in 2015 investigating Indonesian biodiesel that was suspected of preventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced artificially low and damaging local producers.
Anticipating the tariffs, traders stocked up on used cooking oil (UCO), raising prices of the feedstock, while costs of biodiesel sank in view of shrinking need for the Chinese supply.
"With large prices of UCO partly supported by strong U.S. and European demand, and free-falling item prices, companies are having a bumpy ride making it through," said Gary Shan, chief marketing officer of Henan Junheng.
Prices of hydrotreated vegetable oil, or HVO, a primary kind of biodiesel, have cut in half versus last year's average to the $1,200 to $1,300 per metric lot and are off a peak of $3,000 in 2022, Shan included.
With low costs, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capacity usually in July, below a peak of 50% last seen in early 2023, according to Chinese consultancies Sublime China Information and JLC.
Meanwhile, diminishing biodiesel sales are boosting China's UCO exports, which experts anticipate are set to touch a brand-new high this year. UCO exports skyrocketed by two-thirds year-on-year in the first half of 2024 to 1.41 million heaps, with the United States, Singapore and the Netherlands the leading destinations.
OUTLETS
While numerous smaller sized plants are most likely to shutter production indefinitely, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring brand-new outlets consisting of the marine fuel market in the house and in the important hub of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.
One of the manufacturers, Longyan Zhuoyue, concurred in January with COSCO Shipping to utilize more biodiesel in marine fuel.
Companies would likewise accelerate planning and structure of sustainable air travel fuel (SAF) plants, executives said. China is expected to reveal an SAF required before the end of 2024.
They have likewise been hunting for brand-new biodiesel clients outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are regional requireds for the alternative fuel, the authorities included.
(Reporting by Chen Aizhu
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China's Biodiesel Producers Seek Brand new Outlets As Hefty EU Tariffs Bite
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