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Fastmarkets’ UCO CIF Amsterdam, Rotterdam, Antwerp (ARA) assessment reached a 2024 high of $1,070 per tonne in December, a nearly two-year high, marking a 21% increase from its 2024 low of $885 per tonne in March.
Fastmarkets’ UCO DDP North-West Europe (NWE) price for the inland market reached €1,175 ($1,222) per tonne in December, a two-year high, up by 28% from its 2024 low of €920 per tonne assessed in January.
“So many factors pushed UCO up and down in price this year; firm demand and high vegetable oil prices kept prices at high levels at the end of the year,” a European source told Fastmarkets.
UCO prices started to uptrend in May amid expectations that the European Commission (EC) would announce preliminary anti-dumping measures against Chinese biodiesel as a result of an investigation launched in December 2023.
Sources anticipated European UCO demand to increase in order to cover biodiesel supply shortages from China, which mostly comes in the form of used cooking oil methyl ester (UCOME).
Price dipped in September to €940 per tonne DDP NWE, close to a 2024 low, amid lower trading and a general downward movement in the vegetable oil complex.
“Anti-dumping measures did not cause as much damage to UCO prices as some people expected and after a little bit of panic buying prices stabilized,” a source said.
On November 15, the Chinese government announced it would be cancelling a 13% export tax rebate for UCO exports effective December 1, causing a price spike of around 25% depending on quality specification.
After trading at $850-870 per tonne on an FOB China basis, offers for bulk shipments reached $1,000-1,050 per tonne for UCOME specification UCO, while UCO for hydrotreated vegetable oil (HVO) production was reportedly offered as high as $1,100 per tonne FOB.
The price increase encouraged European importers to turn to alternative origins, sourcing biofuel feedstock from South America, Middle East and North Africa at more competitive levels, but volumes remained insufficient to fully cover demand.
Expensive freight rates for both container-sized and bulk shipments also added to a disadvantage for Chinese UCO in the European market; sources expect freight to stabilize in January 2025.
European UCO prices trended upward in November-December amid consistent demand and low availability as well as firm vegetable oil prices, particularly for European rapeseed oil and crude palm oil delivered from Asia.
Sources expect global UCO prices to continue moving up in the first quarter of 2025, supported by demand and general feedstock availability.
UCO demand is likely to grow in Europe with sustainable fuel production mandates increasing in 2025 and a 2% sustainable aviation fuel (SAF) production obligation being introduced.
Some European countries are to decrease or ban virgin vegetable oils usage in biofuel production in 2025, adding to waste feedstock demand such as UCO.
Palm oil availability for exports into Europe is also expected to decrease as Indonesia, the world’s largest palm oil producer, is to revise its biodiesel blending mandate up to 40% in January from the current 35% adding to the country’s local consumption.
The country’s palm export duties and production concerns also contribute to lower export expectations.