D4 RINs spike amid intraday climb in US BO-HO

Houston — Renewable identification numbers spiked in morning US trading July 30, driven by a sharp uptick in the US BO-HO factor.

"[BO-HO] was ripping this morning," said one source. "Got up to plus 6.30 [cents/gal] change on day."

The BO-HO is the relationship between feedstock soybean oil and blendstock heating oil that the biodiesel industry uses to gauge costs and margins.

S&P Global Platts calculated the BO-HO at 93.34 cents/gal on July 29.

A higher BO-HO suggests worse blending economics for biodiesel, which set RINs buyers on the hunt.

If less physical biodiesel is blended due to poor economics, then market participants would have to buy D4 RINs to cover their federal biofuel obligations.

D4 RINs traded as high as 64 cents/RIN on July 30, compared with a Platts assessment of 62 cents/RIN on July 29.

Though only 2 cents higher, volatility in RINs markets has been at multi-week lows, making the sharp uptick a point of interest for traders.

D6 RINs, the most liquid category of RIN, were nearly unchanged despite the climb in D4 RINs, with afternoon trading heard at 47.50 cents/RIN, down from a July 29 assessment of 47.75 cents/RIN.