Renewable Fuel Equities Outperform Broader Market Despite Weekly Dip, TPH Energy Says
Second-quarter renewable fuel margins remained stronger than the prior quarter despite mixed weekly trends, while renewable fuel stocks outperformed the broader market, TPH Energy said in a Monday note.Renewable fuel equities slipped an average of 0.1% last week, outperforming the S&P 500's 2.0% decline, TPH said. On the renewable natural gas side, OPAL Fuels (OPAL) gained 14.0%, while Aemetis (AMTX) dropped 12.8%.Green Plains (GPRE) rose 1.8%, although TPH said the stock could have reacted more strongly after the White House urged lawmakers to approve year-round E15 gasoline sales. The company also noted investor interest in Neste, which gained 2.6% despite lower oil prices and the reopening of the Strait of Hormuz.Weekly margin indicators produced mixed results, with renewable diesel margins increasing by 11 cents per gallon to 50 cents/gal, while Midwest ethanol margins fell 2 cents/gal and US soy crush margins declined $2 per ton. Renewable natural gas margins were unchanged, TPH added.Compared with the first quarter, most spot margin indicators strengthened during the second quarter, with renewable diesel margins from soybean oil rising 81 cents/gal, white grease increasing 49 cents/gal, and corn oil gaining 21 cents/gal, TPH said.Midwest ethanol margins improved 31 cents/gal, soy crush margins increased $52 per ton, and renewable natural gas margins rose $1 per million British thermal units from the first quarter, according to TPH Energy.The largest quarter-over-quarter decline came in renewable diesel produced from tallow, where margins fell by 63 cents/gal as feedstock costs increased sharply, the note added.Among last week's industry developments, the US finalized the Regenerative Feedstock Rule, while LanzaTech canceled its 80,000-metric-ton ethanol-to-jet sustainable aviation fuel plant in Wales, TPH said.The report also highlighted Amazon's (AMZN) investment in Brazilian sustainable aviation fuel producer GranBio and noted that China's used cooking oil exports reached an 18-month high as shipments to the US increased, according to TPH Energy.
