Anti-dumping keeps EU bio trade focus on spot

15/01/2013 12:00 - 409 Views

London, 11 January (Argus) — The European physical biodiesel trade is keeping its focus firmly on spot business at the start of this year. Uncertainty over the pending shape of the EU's import tariff structure continues to hang over the market as the EU investigates alleged dumping of Argentinian and Indonesian biodiesel.

The anti-dumping investigation began at the end of August. The deadline for the publication of any provisional duties is 29 May 2013. Definitive measures have to be imposed by 28 November 2013 at the latest — 15 months after the start of the investigation.

The EU has retained the option of applying retroactive anti-dumping duties to Argentinian and Indonesian imports should it decide to proceed with new duties.

Provisional duties would have to enter into force by May 2013. Retroactive duties would apply to material imported up to 90 days before provisional duties were introduced. This raises the possibility that retroactive duties could be imposed on material imported from the EU's two main sources of overseas supply in the first quarter of this year.

At the same time, there is a continuing anti-subsidy investigation on biodiesel from Argentina and Indonesia, which started in November. The deadline for the publication of provisional measures is 10 August 2013, and for definitive measures it is 7 December 2013.

The EU will not comment on the investigations before it decides whether to publish any provisional measures in its official journal.

As the investigations continue, traders face an array of questions that could affect the economics of fresh imports, depending on whether the EU decides to proceed with duties, and, if it does proceed, their potential size and ultimate implementation date. The uncertainty is having differing impacts on Argentinian and Indonesian imports.

Argentinian SME is continuing to trade into Europe, destined mainly for storage. January SME flows are likely to be higher than December flows, with most business continuing to be concluded only for prompt dates on a fob Argentina basis, to minimise any risk of falling foul of new EU duties.

There is greater disruption to PME trade into Europe, given the skew towards cif deals in the market, which leaves sellers carrying the risk of the EU's duty structure shifting between loading in southeast Asia and unloading in Europe.

Some dealers are turning to more expensive Malaysian PME to avoid any risk of falling foul of new EU duties. Indonesian PME offers are close to gasoil flat on a T1 basis, with Malaysian material offered well above this.

Meanwhile, the renewal of the $1/USG biofuel blenders' credit is making arbitrage to the US for discretionary blending into diesel look more attractive, adding to existing inflows for discretionary blending into heating oil.

11 Jan 2013, 3.16 pm GMT

Source: argusmedia.com