October Pricing Analysis - European SAF

Summary

SAF Neat HEFA NWE FOB Barges fell 16.1% MoM to a $2,443.02/mt average, sliding from $2,705.75/mt on 1 October to $2,398.50/mt on 30 October. Obligated buyers had covered their 2026 needs, so spot demand dried up as Chinese SAF exports reached their highest monthly volumes since China began reporting them separately in January 2026, and new Asian exporters added length. The green premium over Jet FOB Barges compressed 39.7% to $822.06/mt, and the move came from the SAF leg falling while jet rose. SAF vs HVO Class II deepened to −$343.75/mt, so HEFA producers have every incentive to maximise HVO output. Rising hydrogen costs squeezed margins further from the cost side. Bear steepening cut M1-M12 to $118.25/mt, far below the structural $400–500/mt norm. The spread to watch is SAF vs HVO: it is now the clearest gauge of how much SAF the region's HEFA plants will choose to make.

Price trends

SAF FOB Barges fell 16.1% MoM; the entire move came in the first eight sessions

• Monthly average $2,443.02/mt vs September's $2,911.35/mt (−16.1% MoM, −10.5% YoY vs $2,729.51/mt).
• High $2,705.75/mt (1 Oct) and low $2,359.75/mt (29 Oct). The intra-month range was $346.00/mt, against $336.50/mt in September.
• Largest single-day fall: −$165.75/mt on 9 October (from $2,538.00 to $2,372.25/mt), as offers in the window reset sharply lower.
• After mid-month the price held near $2,400/mt. A flat second half points to a market that found its clearing level without new compliance demand to lift it.
• SAF 50% Blend FOB Barges fell less, down 8.8% MoM to $2,032.00/mt, because its fossil jet half rose.

Feedstock trends

Feedstock eased slightly while hydrogen rose 28%; producer margin over cost fell 55% open-to-close

• UCO NWE FOB fell from $1,430.00/mt to $1,352.50/mt (−5.4%), with the average down 0.8% MoM. Tallow Cat 1&2 averaged $1,022.91/mt (−2.0% MoM).
• China's exports under HS 1518, the code carrying its used cooking oil shipments, fell 23.4% m/m to 259,009 mt in September (GACC). NWE UCO still eased, so tighter Chinese supply did not lift European feedstock.
• Grey Hydrogen Netherlands rose from $4.81/kg to $6.18/kg (+28%) as European gas strengthened. SAF NL production cost rose from $1,988.25/mt to $2,057.25/mt even though feedstock prices fell.
• SAF FOB over NL production cost fell from $727.25/mt to $326.75/mt, a low of $317.00/mt on 29 Oct. About three-quarters of the squeeze came from the SAF price falling; hydrogen-driven cost accounted for the rest.

Cross-commodity dynamics

The green premium fell 39.7% as SAF fell and jet rose; SAF vs HVO deepened by $270/mt

• The green premium closed at $784.75/mt, with a low of $737.50/mt on 21 Oct. The SAF leg falling did most of the work: jet rose only 4.8%.
• SAF vs HVO touched −$527.00/mt on 6 Oct. HVO fell only 6.6% against SAF's 16.1%, so the regional HEFA slate now rewards HVO output over SAF. The same tilt is visible in Asia, which points to a global allocation shift rather than an NWE-only one.
• Voluntary SAF demand moved to the US, where buyers can stack credits for a better return. That left European buying almost entirely mandate-driven.

Market activity

Offers walked lower through early October and no trades were confirmed; the producer selling seen in September was absent

• More bids and offers were posted than in September, but no trades printed, after a handful in September. With compliance needs covered, neither side had to meet the other.
• On the sell side, an Asia-linked trading house led offers throughout the month. This is intermediary positioning on imported barrels looking for a home in ARA.
• Offers gave way steadily over the first two weeks. The sharpest reset came on 9 October, when an integrated major cut its offer and a refiner bid far lower, matching the −$165.75/mt assessment fall that day.
  • Regime change: an integrated producer that sold actively in September did not appear in October, which removed producer flow from the offer side.
  • The buy side broadened: trading houses joined an integrated major on the bid side, positioning on the discount rather than buying to cover mandates.
• The window was silent from 20 to 26 October. When activity returned, bids and offers sat in a standoff, consistent with the price plateau.

Curve structure

Bear steepening; M1-M12 narrowed to $118.25/mt, far below the structural norm

• M1 fell $288.00/mt while M12 fell $210.75/mt. The front led the decline as prompt length built, and the back held.
• M6 (Apr-27) at $2,234.75/mt sits above M3 (Jan-27) at $2,212.75/mt. That kink prices a firmer 2027 than winter.
• The allocation curve shifted toward HVO along its whole length: SAF vs HVO M12 moved from −$145/mt to −$305/mt.

Price volatility

The green premium's CV more than doubled to 13.36% while flat-price CV held at 3.44%

• Flat-price volatility stayed in its recent range. The volatility sat in the relationship to jet, because SAF and jet moved in opposite directions.
• Hedges based on a stable green premium need repricing. The premium's monthly CV was 3–6% from May to September.

Something to watch

• SAF vs HVO as the allocation gauge:
  • Observation: the spread closed at −$380.25/mt, against a −$73.41/mt average in September.
  • Why it matters: a sustained deep inversion moves HEFA capacity to HVO and caps SAF supply. A return toward September levels would signal compliance buying is back.
  • What to monitor: the daily SAF vs HVO close and early-2027 compliance tenders.
• Hydrogen as the cost floor:
  • Observation: Grey Hydrogen Netherlands closed at $6.18/kg, up 28% in October.
  • Why it matters: with margin over cost at $326.75/mt, further gas strength pushes merchant producers toward run cuts.
  • What to monitor: daily Grey Hydrogen Netherlands, TTF front-month and the SAF margin over cost.
• Rhine water levels and barge logistics:
  • Observation: the Kaub gauge is forecast to fall below 40 cm (WSV).
  • Why it matters: low water raises barge freight and restricts loading for inland ARA barge deliveries.
  • What to monitor: the daily Kaub gauge (WSV).
• Chinese SAF exports into Europe:
  • Observation: China exported 156,971 mt of SAF in September (+19.4% m/m), its highest monthly volume since separate reporting began in January 2026. Belgium took 73%, and every tonne exported January to September went to Europe. The declared customs unit value was $2,397/t FOB China, up from $2,151/t in August; this is a customs value, not a market price (GACC). A 225,000 mt/yr HEFA plant in Zhoushan targets trial production by end-March 2027.
  • Why it matters: with European compliance needs covered, extra Chinese volume lengthens supply into ARA rather than meeting new demand, and Zhoushan adds to that from 2027.
  • What to monitor: the GACC October export print, due around 20 November.

Note: All figures, prices and market activity referenced in this report are based on the period 1 to 30 October 2026.