- Output halved at 240,000 mt/yr Marl plant due to cheap imports.
- 800,000 mt of Argentine biodiesel exported to EU in H2 2017.
- FAME 0 prices fell 20% since late last year.
- EU to impose new antidumping duties on Argentine biodiesel.
Production Cut
German biodiesel producer Natural Energy West (NEW) announced on April 9 that it will halve output at its 240,000 mt/year plant in Marl. This decision is a response to the impact of cheap imports from Argentina and Indonesia following EU antidumping duty rulings.
Market Impact
NEW is the third German biodiesel producer in a month to reduce output due to rising imports and falling prices, which have squeezed margins at many EU plants, especially those using domestically-produced rapeseed oil. The reduced production will only service existing supply contracts for biodiesel and pharmaceutical grade glycerine.
Import Surge
Approximately 800,000 mt of Argentine biodiesel was exported to the EU in the second half of 2017. This surge followed the World Trade Organisation's ruling against the EU's antidumping duties and the EU's subsequent lowering of tariffs. The US had previously blocked Argentine biodiesel imports, leading producers to target European markets.
Price Decline
The influx of biodiesel has led to a 20% drop in fatty methyl ester (FAME 0) prices since late last year. This has prompted many producers, particularly in Germany, to reassess production levels and call for government intervention.
Future Actions
The EU is expected to impose new antidumping duties on Argentine biodiesel in the coming months, after scrapping the previous levies due to WTO and ECJ rulings. NEW's CEO Detlef Volz has urged the federal government to protect the German biodiesel industry and related jobs from unfair trade practices by Argentina and Indonesia.
Industry Response
Other companies have also reacted to the market conditions. Bunge announced a 50% output cut at its 120,000 mt/year Mannheim plant, and ADM suspended all production at its 275,000 mt/year Mainz plant for Q2, both citing the impact of cheap imports.
