European UCO and animal fat prices rise on strong biofuel demand

Prices for used cooking oil (UCO) and category 3 animal fats in Europe rose by around €10–30/t, or 1–3%, in the week ending September 10. The market was supported by stronger demand from biofuel and feed producers, as well as high volatility in crude oil and gasoil futures.

Amid escalating tensions in the Middle East, the September ICE gasoil futures contract climbed to $1,464/t. This supported higher biodiesel prices in Europe and improved producer margins. Mid-week, UCO prices rose by more than €50/t to €1,280–1,290/t DDP Northwest Europe.

Prices also increased in the UCO import market. Container deliveries were assessed at around $1,300–1,305/t CIF ARA, while bulk cargoes were quoted at $1,365–1,375/t. FOB ARAG bids reached $1,400–1,405/t, while sellers were offering material at $1,430–1,450/t.

Animal fat prices were also supported by demand from the biofuel, feed and aquaculture sectors. Poultry fat posted the strongest gains due to shortages of fish oil from South America. Poultry fat with a maximum 2% free fatty acid content was assessed at €1,200–1,220/t DDP Northwest Europe.

The market outlook remains mixed. Some participants expect support from US demand and continued strong activity in the biofuel sector, while higher slaughter rates in Europe and increased animal fat supply could put downward pressure on prices.

Tags: EU, prices, biofuel, UCO, used cooking oil