London — The premium for European RED FAME 0 biodiesel over ICE gasoil fell by $15.25 Wednesday to $333.75/mt, the largest fall since August 28 while the premium for RED RME fell $19.75 to $456.75/mt, the largest day-on-day fall since September 3.
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The moves came about on a day when ICE gasoil futures shot up, with the front-month $20.50 higher at $451.50/mt and the second-month up $20.25 at $457.50/mt at Platts 1630 London time close.
Only one session before the fall in premiums, the RED RME premium was at its highest level since Platts records began of $476.50/mt supported by high RME prices and low gasoil futures.
The large day-on-day falls were not unexpected by market participants.
The moves were seen by one trader as a natural correction although the "physical was subdued" during the day as trading stalled while participants cautiously waited for ICE gasoil movements to settle down.
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--Edited by Jonathan Dart, firstname.lastname@example.org