Ethanol Blog
Myke Feinman Refine Fuels Reporter

Friday 07/26/13

RIN Values Drop on Speculation over Change to RFS

After fear the ethanol industry would not produce enough ethanol to meet the Renewable Fuel Standard mandate for 2014, 2013 D6 renewable fuel Renewable Identification Numbers plummeted more than 30 cents Thursday to $1.025. Market participants speculate RFS quotas would ease, traders said.

Just last week, 2013 D6 RINs, which are primarily generated from corn-based ethanol production surged to $1.46 after trading for less than 10 cents at the start of 2013.

"The market roared higher on the consensus that the RINs program is broken and will create massive chaos from 2014," said Walter J. Zimmermann Jr. of United ICAP. "Then the market collapsed on the fear that the program will be fixed."

This year's mandate for blending ethanol into gasoline is 13.8 billion gallons. An expected shortfall in D6 RINs for this year is seen bridged by carryover RINs from 2012, but analysts say the surplus will be erased in 2013 while the mandate for 2014 is even higher.

"I am sure there is a lot of talk (about an RFS fix), but until its concrete, this market is a bit extreme," asserted a broker Thursday afternoon.

Myke Feinman can be reached at myke.feinman@telventdtn.com.

Posted at 10:49AM CDT 07/26/13 by Myke Feinman
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