Asia’s UCO market expected to revive in 2024 amid rising demand for biodiesel
New Delhi: As demand for sustainable feedstock increases, Asia‘S used cooking oil (UCO) market is expected to boom in 2024.
However, the outlook for used cooking oil methyl ester (UCOME) faces uncertainty European Union (EU), with investigations into Chinese biodiesel imports, according to S&P Global Commodity Insights.
FOB UCO China price is set for a correction after December 2023 low, driven by increased demand inquiries from European buyers expected in January.
Traditionally, European buyers replenish UCO inventories in the first quarter, leading to an expected recovery in demand. China’s UCO spot price saw a 51 per cent decline from the June 2022 high through early December 2023, reflecting challenging biodiesel fundamentals in Europe.
However, expectations of increased demand after winter indicate a potential market boom. malaysiaUCO supply is projected to be actively sought in 2024, following increased shipments to Singapore, the EU and the US in Q4 2023.
The EU in particular saw a 43 percent increase in Malaysian UCO shipments in November. China’s UCO exports to the US, a market that gained prominence in 2023, are likely to continue in 2024.
The US, with favorable incentives for sustainable aviation fuel and biodiesel producers, presents an attractive market for Chinese UCO exporters.
On the other hand, China’s UCOME biodiesel will face challenges as early as 2024 as the EU tightened controls on Chinese biodiesel imports and launched antidumping investigations. There may be downward pressure in the UCOME market amid these regulatory developments, which will impact China’s supplies to the EU.
While the UCOME market anticipates positive momentum, uncertainties in the UCOME sector underline the complex dynamics of Asia’s biodiesel landscape in the year ahead.
However, the outlook for used cooking oil methyl ester (UCOME) faces uncertainty European Union (EU), with investigations into Chinese biodiesel imports, according to S&P Global Commodity Insights.
FOB UCO China price is set for a correction after December 2023 low, driven by increased demand inquiries from European buyers expected in January.
Traditionally, European buyers replenish UCO inventories in the first quarter, leading to an expected recovery in demand. China’s UCO spot price saw a 51 per cent decline from the June 2022 high through early December 2023, reflecting challenging biodiesel fundamentals in Europe.
However, expectations of increased demand after winter indicate a potential market boom. malaysiaUCO supply is projected to be actively sought in 2024, following increased shipments to Singapore, the EU and the US in Q4 2023.
The EU in particular saw a 43 percent increase in Malaysian UCO shipments in November. China’s UCO exports to the US, a market that gained prominence in 2023, are likely to continue in 2024.
The US, with favorable incentives for sustainable aviation fuel and biodiesel producers, presents an attractive market for Chinese UCO exporters.
On the other hand, China’s UCOME biodiesel will face challenges as early as 2024 as the EU tightened controls on Chinese biodiesel imports and launched antidumping investigations. There may be downward pressure in the UCOME market amid these regulatory developments, which will impact China’s supplies to the EU.
While the UCOME market anticipates positive momentum, uncertainties in the UCOME sector underline the complex dynamics of Asia’s biodiesel landscape in the year ahead.
