July Pricing Analysis - European SAF

SAF Neat HEFA NWE FOB barges rose 6.28% open-to-close to $2,840.75/mt but averaged $2,756.47/mt, up 1.07% MoM and 34.47% YoY. The move was in the premium, not the flat price: renewed US-Iran military activity restricting Hormuz transits lifted the distillate complex, jet repriced +15.30% MoM to $1,190.60/mt, and SAF, anchored to a feedstock that moved 1.78%, did not follow, compressing the premium from $1,698.00/mt to $1,490.25/mt. The 2% blend gained 13.99% MoM off the fossil leg. M1-M12 widened from $180.00/mt to $474.00/mt, bull steepening with the front gaining 10.5x the back. Activity flipped bid-led at 1.40 from 0.75, but both trades cleared below $2,594/mt before the rally, so the $2,930.75/mt high carries no executed confirmation.

MARKET ACTIVITY

• 26 entries over 14 active days: 14 bids against 10 offers (1.40), reversing June's 9 against 12 (0.75), as trades fell from 4 to 2
• Both cleared in the first four sessions, at $2,593.72/mt (1-Jul, BP from Petroineos) and $2,568.30/mt (6-Jul, Shell to BP); nothing cleared on the 8 to 23 July climb, so the high is discovery, not confirmed value
• BP quoted both sides across 10 entries, intermediary positioning; producer Neste bid twice, signaling sourcing

PRICE ACTION

• Opened $2,673.00/mt, closed $2,840.75/mt; average $2,756.47/mt against June's $2,727.18/mt and July 2025's $2,049.86/mt; low $2,567.75/mt (7-Jul), high $2,930.75/mt (23-Jul), range $363.00/mt against June's $444.75/mt
• Largest session +$140.25/mt (+5.46%) on 8-Jul off the low, the turn that set up the month

SAF Neat HEFA NWE FOB Barges

CROSS-MARKET DYNAMICS

• Renewed US-Iran military activity restricting Hormuz transits lifted the distillate complex; Jet NWE CIF averaged $1,190.60/mt against $1,032.60/mt (+15.30% MoM) and the SAF-jet differential fell from $1,698.00/mt to $1,490.25/mt (-12.23%)
• Mechanism is the feedstock anchor: UCO NWE FOB averaged $1,342.07/mt (+1.78% MoM), so SAF could not track the complex, and its diff to LSGO D7-D28 eroded 8.36% MoM to $1,520.10/mt as a drift, not in gaps
• Competition for hydrotreating capacity eased: HVO Class II against ULSD fell 13.64% MoM to $1,563.85/mt, cutting the incentive to run HEFA capacity for road diesel over jet

CROSS-REGIONAL DYNAMICS

• Loading January to July 2026, SAF-containing cargoes numbered 39 fixtures against 56 in the same seven months of 2025, yet held 51% of finished HEFA loadings against 54%, so SAF's share is unchanged while the finished leg shrank to 76 fixtures and 1,730kt from 104 and 2,112kt, according to shipping data tracked by GX.
• China is the growing dependency: 24 of 35 Europe-bound SAF-containing cargoes loaded there in Jan-Jul 2026 against 13 of 38 a year earlier, and 767kt of a flat 1,164kt total against 321kt, so its share moved from a quarter to two thirds by displacement; 5 of July's 6 loaded in China
• Feedstock loadings rose to 125 fixtures and 2,012kt from 101 and 1,372kt, consistent with firm UCO into NWE, while China's feedstock share fell to 29% from 50%
• Bucketed by laycan: cargoes loading in the stated months, not arrivals. Sample is partial and directional; July's cohort is provisional; co-load tonnage is HEFA (HVO/SAF) cargo, not only SAF; the China increase sits with one charterer, 19 of 39 fixtures.

CURVE STRUCTURE

• Bull steepening: M1 gained $325.00/mt against M12's $31.00/mt, the front 10.5x the back, pricing prompt tightness against an unchanged deferred view
• The move ran the length of the curve, not just the front (M1-M6 +$247.25/mt), which rules out a prompt squeeze confined to M1-M2

PRICE VOLATILITY

• On the basis the market quotes SAF was stable, its diff to LSGO D7-D28 running 3.89% against June's 3.96%, while jet's regrade over the same futures ran 58.64% (CIF) and 69.89% (barges), swinging from +$108.75/mt to -$3.25/mt
• The premium therefore inherits jet's instability, not SAF's; a hedge sized off SAF's diff CV underprices it by an order of magnitude

SOMETHING TO WATCH

• SAF-jet premium as the compliance-cost gauge:
  • Observation: $1,490.25/mt at month-end against $1,698.00/mt at open, July's low
  • Why it matters: a cheaper premium cuts the cost of meeting the blending obligation, so sustained compression pulls compliance buying forward; re-widening above $1,700/mt restores the incentive to buy the minimum and defer
  • What to monitor: weekly premium close, Jet NWE CIF, and SAF's share of tracked finished HEFA loadings, 40% in July against 51% YTD
• M1-M2 as the prompt tightness canary:
  • Observation: +$108.50/mt at month-end from +$19.75/mt at open
  • Why it matters: above $150/mt confirms prompt scarcity rather than carry; below $50/mt signals easing and likely premium retracement
  • What to monitor: weekly M1-M2 close, and executed barge trades, two in July against four in June

Note: All figures, prices and market activity referenced in this report are based on the period covered by this monthly update.

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