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Asia’s used cooking oil market eyes revival in 2024 amid growing biodiesel demand

New Delhi: As the demand for sustainable feedstock rises, Asia’s used cooking oil (UCO) market anticipates an upturn in 2024.

However, the outlook for used cooking oil methyl ester (UCOME) faces uncertainty in the European Union (EU), with scrutiny on Chinese biodiesel imports, according to S&P Global Commodity Insights.

The FOB UCO China price is poised for recovery after December 2023 lows, driven by heightened demand inquiries from European buyers expected in January.

Traditionally, European buyers replenish UCO inventories in the first quarter, leading to an anticipated improvement in demand. China’s UCO spot price witnessed a 51 per cent decline from June 2022 highs to early December 2023, reflecting challenging biodiesel fundamentals in Europe.

However, expectations of increased demand post-winter indicate a potential market rebound. Malaysia’s UCO supplies are anticipated to be actively sought after in 2024, following a surge in Q4 2023 shipments to Singapore, the EU, and the US.

The EU, in particular, showed a 43 per cent 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 favourable incentives for sustainable aviation fuel and biodiesel producers, presents an attractive market for Chinese UCO exporters.

On the other hand, China’s UCOME biodiesel faces challenges in early 2024 as the EU tightens scrutiny on Chinese biodiesel imports, initiating an antidumping investigation. The UCOME market may experience downward pressure amid these regulatory developments, impacting China’s supplies to the EU.

While the UCO market anticipates positive momentum, uncertainties in the UCOME sector underline the complex dynamics of Asia’s biodiesel landscape in the coming year.

(With inputs from ANI)

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