Ethanol, advanced biofuel RINs hit eight-month lows amid selloffs

Houston (Platts)--22Oct2013/525 pm EDT/2125 GMT


Current-year ethanol and advanced biofuel RINs assessments fell to their lowest levels in more than eight months Tuesday as heavy selloffs continued throughout the market, sources said.

Corn-based ethanol (D6) RINs were assessed 0.5 cent lower to $0.2950/RIN, advanced biofuel (D5) RINs fell 1 cent to $0.42/RIN and biomass-based diesel (D4) RINs shed 1 cent to $0.51/RIN.

Current-year ethanol RINs were assessed at their lowest level since February 19, while advanced biofuel RINs were at their lowest since January 28.

Current-year ethanol RINs were reported traded seven times by time of assessment at choppy levels last heard at $0.2950/RIN.

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Current-year ethanol RINs assessments have slumped for seven of the last nine sessions as traders wait for the US Environmental Protection Agency to release its proposed 2014 blending requirements under the Renewable Fuel Standard.

Although market sources said more than a month ago they expected the 2014 proposed blending requirements for the RFS to be released by the end of September, the partial shutdown of the US federal government delayed the release.

EPA sent its proposal to White House's Office of Management and Budget on August 30.

RINs prices soared for much of 2013 on aggressive buying ahead of the pending "blend wall." The term describes when the maximum amount of the US gasoline pool has been blended with 10% ethanol. Refiners will then be under pressure to run higher ethanol blends or buy RINs, unless Congress is pressured to alter the RFS.

The four-week rolling average of the ethanol blending rate was at a 19-week high of 9.70% for the week ended October 11, which was 0.3 percentage point away from the 10% "blend wall," Energy Information Administration data showed Monday.

The EPA issues a RIN to track renewable fuel usage throughout the supply chain.

Refiners, importers and blenders -- called "obligated parties" -- use RINs to show the EPA they have fulfilled their government-mandated use of renewable fuels. If the obligated party has not used enough physical product, it can buy RINs to satisfy the quota.

--Jordan Godwin, jordan.godwin@platts.com
--Edited by Jeff Barber, jeff.barber@platts.com

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