Analysts and trade sources say ethanol D6 Renewable Identification Numbers continue to provide support for or exert pressure on biodiesel D4 RINs. RINs are the credits utilized by refiners, blenders and importers to show compliance with the Renewable Fuel Standard.
On March 25, ethanol 2013 D6 RINs dropped in value, pressuring 2013 D4 biodiesel RINs, with both markets quiet and prices flat March 26. "Ethanol RINs are dragging (biodiesel RINs) down," a biodiesel broker said March 25.
Ethanol D6 2013 RINs traded $1.10 two weeks ago, but have since dropped back to 64.0 cents March 26 afternoon. Biodiesel D4 RINs, with one D4 RIN equivalent to 1.5 D6 RINs, were a few cents higher than D6 RINs, ranging between 68.0 cents and 76.0 cents that day. Early March 27, D4 biodiesel 2013 RINs traded at 77.0 cents while D6 2013 ethanol RINs ranged between 65.0 cents and 68.0 cents.
"Previously, biodiesel prices were artificially high because of the ethanol RIN prices," commented Michael Walker, Quantitative Analyst, Augsburg Energy Ramsey, N.J., on March 26 afternoon. "The biodiesel 2013 RIN premium over ethanol 2013 RINs has been relatively stable between 7.0 to 9.0 cents, indicating that they follow each other well."
Myke Feinman can be reached at email@example.com.
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