Front-month Singapore jet rose 11.9% MoM and gasoil 10ppm 14.3%, recovering most of June's collapse, while the renewable grades barely moved and green premiums narrowed across the board. HVO Class II was the outlier, the only grade lower MoM at −2.1%, with its premium over gasoil down 10.7% against SAF's 4.9%. UCO held firm and closed at its monthly high as domestic demand in China and Straits export demand remained steady throughout.
PRODUCT TRENDS
- SAF Neat HEFA Malacca Straits FOB averaged $2,688.85/mt. The finished product started the month at $2,596.75 (1 Jul) and landed at $2,771.50 (31 Jul), a +1.3% MoM (+$35.31).
- HVO Class II Malacca Straits FOB averaged $2,665.23/mt, open $2,617.50 (1 Jul), close $2,776.00 (31 Jul), a −2.1% MoM dip in price levels (−$58.25).
- Both products fell to a trough in the middle of the month before rallying mid-month alongside the recovering fossil complex, but at a fraction of its pace, acting as laggards rather than leaders.
FEEDSTOCK TRENDS
- UCO Straits FOB averaged $1,168.00/mt, +0.9% MoM (+$10.50), +11.8% YoY closing at the month's high of $1,180/mt. UCO East China averaged $1,167.00/mt and closed $5.00/mt above Straits at $1,185/mt. Demand for feedstocks remained firm as crude oil and refined product pricing stayed well above seasonal levels given the US-Iran war and emerging geopolitical risks.
- CPO Singapore Straits FOB (USD) averaged $1,117.89/mt, +0.3% MoM (+$3.27) and +13.7% YoY ($983.20 Jul 2025); low $1,091.88 (2 Jul), high $1,145.07 (24 Jul). Palm steadied after June's fall as the recovering crude oil complex boosted palm oil's appeal as a biofuel feedstock, alongside the other vegetable oils.
PRODUCTION MARGINS
- Modeled HVO HEFA (UCO) production cost averaged $1,766.84/mt (+1.4% MoM) and SAF Neat HEFA (UCO) $1,842.57/mt (+1.5% MoM); against UCO feedstock the production margin spreads were +$598.84/mt and +$674.57/mt respectively, both up ~2.5% MoM as cost tracked feedstock one-for-one
- Stable cost against a −2.1% fall in traded Class II confirms that grade's weakness was not related to the cost of production. The traded Class II margin fell to $898.42/mt from $982.15 (−8.5% MoM), while SAF against modeled cost held flat at $846.34/mt (+0.8%)
Cross-Commodity Dynamics
- Green premiums narrowed as renewables failed to follow the fossil rebound; Class II absorbed almost all of it.
- HVO green premium (HVO Class II minus gasoil 10ppm) averaged ~1,601.9/mt vs June's $1,792.9 (−10.7%); the direction reversed from June, when the premium widened 6.2% as gasoil collapsed 19.3% while Class II fell only 4.1%. The month of July saw higher gasoil prices on average, resulting in a tighter green premium against HVO.
- SAF green premium (SAF minus Singapore jet) averaged $1,588.3/mt vs June's $1,669.6 (−4.9%).
SOMETHING TO WATCH
- Indonesia B50 biodiesel policy, as implemented by the Indonesian government on the 1 July, is likely to see lower volumes of exports. Palm oil producer group GAPKI had forecasted that export volumes may greatly decrease as the country will need 14.6 million tons of crude palm oil to fulfill the B50 mandate.
- El Nino's impact on feedstock production as the World Meteorological Organization expects above-normal temperatures worldwide which will affect production yields and subsequently the final refined biofuel product.
- Green premium spread: With no significant mandate, pricing and availability remain the main factors for adoption. A tighter green premium spread due to oil geopolitics is likely to move more buyers towards green fuels.
Note: All figures, prices and market activity referenced in this report are based on the period.
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