The picture shows the proportion of the main raw materials of biodiesel in the United States Pneumatic Ball Valve,3Pc Ball Valve,Sanitary Ball Valve,Threaded Ball Valve WENZHOU FOREVER CLASSIC TECHNOLOGY CO.,LTD , https://www.fosicvalve.com
In contrast, the supply of soybean oil is increasing. Since 2010, the annual output of soybean oil has increased from 18.9 billion pounds to 22.6 billion pounds, with an average annual growth rate of 2.58%. New supply is increasingly dependent on industrial use, and with the development of renewable energy applications, the biodiesel industry is gradually emerging.
Since 2000, the biodiesel industry has opened up a spurt development model. As of the end of 2016, biodiesel demand increased 200-fold, from 10 million gallons to 2.06 billion gallons. However, the growth rate of production is slightly inferior. 
The picture shows the annual output of American B100 biodiesel
Due to insufficient domestic effective supply, the import market has flourished. The United States has changed from a net exporter of biodiesel to an import-dependent country. The annual net import of biodiesel in the United States reached 14.4 million barrels, accounting for 29.4% of the country's total demand.
According to the US Energy Agency (EIA), biodiesel production in the United States is dominated by vegetable oils and animal oils. Among them, the amount of vegetable oil is much higher than animal oil.
The United States is a traditional soybean producing country, and most of the vegetable oil in biodiesel comes from soybean oil. The US biodiesel production has generally maintained a growth trend. The biodiesel consumption of soybean oil increased from 1.141 billion pounds in 2010 to 6.095 billion pounds in 2016, accounting for about 60% of the total. It is the most important raw material for biodiesel production in the United States. (1663, -4.00, -0.24%) The amount of oil, vegetable oil and animal oil was gradually adjusted to 10%.
US double-reverse investigation of biodiesel in Argentina and Indonesia
Currently, the largest source of US biodiesel imports is Argentina and Indonesia. In 2013, the EU’s anti-dumping policy against Argentina and Indonesia’s biodiesel plunged biodiesel exports in both countries, and the United States resumed a $1 per gallon tax credit for biodiesel in the year, making the United States an Argentine and Indonesia's new export destination for biodiesel. From 2014 to 2016, Argentina and Indonesia's exports of biodiesel to the United States surged. Among them, Argentina's exports to the United States increased from 407 million gallons to 443 million gallons, an increase of 843%; Indonesia's exports to the United States increased from 51 million gallons to 111 million gallons, an increase of 117%.
In 2016, the total US biodiesel imports were 693 million gallons and the total consumption was 2.06 billion gallons. Among them, imports from Argentina were 443 million gallons, accounting for 63.90% of total imports; imports from Indonesia were 111 million gallons, accounting for 16.07% of total imports. In the same year, the United States imported biodiesel from Argentina and Indonesia, accounting for nearly 80% of total imports, accounting for nearly 27% of total consumption.
The picture shows the amount of biodiesel imported from Argentina and Indonesia.
The American Biodiesel Producers Association believes that the export tax rebate for biodiesel exports from Argentina and Indonesia has caused serious market unfairness. The 50,000 jobs provided by the US biodiesel industry are threatened by unfair trade. Exports from Argentina and Indonesia have had a huge impact on the US biodiesel industry. In April 2017, the US Department of Commerce submitted an anti-dumping and anti-subsidy investigation application to the SME of Argentina and the PME of Indonesia to the US International Trade Commission.
On May 5th, the US International Trade Commission voted to approve the application, acknowledging that the low-cost imports caused substantial harm to the US biodiesel industry. It is expected to start to impose countervailing duties from August and anti-dumping duties from October.
Anti-dumping and anti-subsidy investigations on biodiesel exports from Argentina and Indonesia are not the first time on a global scale. As early as 2013, the EU decided to impose tariffs of 41.9% - 49.2% and 8.8% - 23.3% on Argentina and Indonesia respectively. In 2016, Peru also decided to impose biodiesel countervailing and anti-dumping duties on Argentina.
If the United States successfully imposes anti-dumping and countervailing duties on biodiesel in Argentina and Indonesia, how will the demand for US soybean oil change? The following is an estimate of the increase in demand for US soybean oil based on published data.
According to the EIA 2009-2016 US B100 biodiesel production and soybean oil consumption statistics, it can be calculated that each production of 1 gallon of biodiesel requires 3.90 pounds of soybean oil.
Table shows the input and output of soybean oil and biodiesel
The EPA announced the 2017 Renewable Energy Standard and the 2018 Biodiesel Minimum Use in November 2016, increasing the minimum biodiesel use in 2018 from 2 billion gallons in 2017 to 2.1 billion gallons. Diesel consumption was 2.06 billion gallons.
In 2018, the minimum demand for biodiesel in the United States was 2.1 billion gallons, calculated on the basis of the same proportion of imports and demand, with an import volume of 706 million pounds. US soybean oil completely replaces biodiesel in Argentina and Indonesia. Considering the proportion of soybean oil in biodiesel production and the ratio of soybean oil to biodiesel, US soybean oil consumption will increase by 2.203 billion pounds. As a result, US soybean oil will replace the demand for biodiesel in Argentina and Indonesia by 10%, and the consumption of US soybean oil will increase by 220 million pounds.
If the United States successfully implements the double-reverse policy on Argentina and Indonesia biodiesel, and starts to impose countervailing duties in August and began to impose anti-dumping duties in October, after August, Argentina and Indonesia will lose their original price competition. Advantage.
Since the market year of soybean oil is from October to September of the following year, the anti-dumping and anti-subsidy policy fully implemented after October has little impact on the balance of supply and demand of US soybean oil in 2016/2017, and mainly affects 2017/2018.
In 2016, US biodiesel consumption was 2.06 billion gallons, and actual production was 1.568 billion gallons. In addition, the annual production capacity of biodiesel is 23.14 gallons, and the capacity utilization rate is 67.76%. According to data released by USDA, US soybean oil production is expected to be 24.907 billion pounds in 2017/2018, and consumption is expected to be 14 billion pounds. After meeting food consumption, the remaining soybean oil can produce 2.797 billion gallons of B100 biodiesel.
The table shows US biodiesel production capacity and monthly production in 2016.
In terms of the actual utilization rate of production capacity, the biodiesel produced by US soybean oil in 2017 will replace 50% of the imports of Argentina and Indonesia. Correspondingly, the demand for US soybean oil will increase by 1.10 billion pounds. In the June report, USDA raised the demand for biodiesel from US soybean oil from 6.2 billion pounds in 2016/2017 to 6.45 billion pounds in 2017/2018, which is not enough. If the United States successfully imposes anti-dumping and countervailing duties on Argentina and Indonesia, the demand for biodiesel for US soybean oil will have at least 850 million pounds of upward adjustment. According to the above data, the US soybean oil stocks will drop sharply from 2.232 billion pounds to 1.382 billion pounds, which is 33% lower than the 2016-062017 2.062 billion pounds. The inventory consumption ratio will also fall from 6.05% in 2016/2017 to 6.08%.
It is foreseeable that the US double-reverse policy on biodiesel in Argentina and Indonesia will greatly improve the ending stocks of the US soybean oil supply and demand balance in 2017/2018, so that the ending stocks will fall sharply, and the inventory consumption ratio will be further reduced, thus raising the price of distant soybean oil. Vibration.
Transfer of subsidies to biodiesel producers will boost their production enthusiasm
Crude oil prices have fallen, production profits have fallen, and imports have been hit by imports. In 2017, US biodiesel production has shrunk compared to 2016. According to data released by the EIA at the end of May, US biodiesel production in the first quarter of 2017 was 302 million gallons, compared with 331 million gallons in the same period in 2016 and 248 million gallons in the same period in 2015. Although the output in the first quarter of 2017 fell compared with the same period in 2016, the decline slowed down from the previous period and exceeded 20% in the same period of 2015.
The table shows the comparison of US biodiesel production (million gallons)
The new US President Trump is supportive of renewable energy. To encourage domestic biodiesel producers to increase operating rates, the US Congress is considering transferring subsidies to blenders of $1 per gallon to producers to increase profits from biodiesel producers and thereby increase production. Policy adjustments will stimulate the production enthusiasm of US biodiesel producers, and biodiesel production in 2017 will exceed 2016, boosting demand for US soybean oil.
At present, there are still many uncertainties in the biodiesel market, but it is certain that if the double-reaction policy is implemented and the subsidy policy for producers is adjusted as scheduled, the demand for US soybean oil will increase beyond market expectations.
In addition, future policy directions also depend on the economic value of biodiesel for crude oil substitution. At present, OPEC's production cuts are less than expected. Even if an agreement to extend the time for production reduction is reached, the unanimous agreement on Qatar by many countries also indirectly indicates that the trust relationship between member states is very delicate. At the same time, at this point in time, the role of the United States is quite important. The data shows that the cost of shale oil mining in the United States is less than 40 US dollars per barrel, and the number of drilling platforms has increased significantly year-on-year. The market expects that by the end of 2017, the average daily output of US crude oil will be 800,000 to 1 million barrels. In this context, the United States proactively increased production and began to export, leaving OPEC in a dilemma of either abandoning production or abandoning market share. The later stage of crude oil is more pessimistic, and the lower the crude oil price, the smaller the substitute meaning of biodiesel, which creates a potential negative for biodiesel production.
On the whole, if the United States successfully imposes anti-dumping and countervailing duties on biodiesel in Argentina and Indonesia, it will boost the demand for biodiesel in the 2017/2018 US soybean oil supply and demand balance sheet. In the USDA's June report, the increase in demand for biodiesel for US soybean oil was not enough, and there is still room for improvement in the later period. In addition, the transfer of biodiesel subsidies from blenders to producers can also stimulate domestic biodiesel production, thereby increasing demand for US soybean oil. Expected to be realized, the ending stocks of US soybean oil will fall sharply, the inventory consumption ratio will be further reduced, and the price of soybean oil will benefit from it. This is also the opportunity for soybean oil to break through the heavy negative factors.
(Author: CITIC Construction Investment Futures)
Soybean oil is the most important raw material in biodiesel production
In order to reduce air pollution and overseas energy dependence, the United States authorized the US Environmental Protection Agency to fully implement renewable energy standards under the Energy Tax Policy Act of 2005, requiring each gasoline and diesel producer and importer to add renewable fuels to transportation fuels. It also specifies minimum standards for renewable fuels including cellulosic biofuels, biodiesel, and advanced biofuels. The US Congress's US Energy Independence and Security Act of 2007 further clarifies the annual renewable energy use before 2022 and requires that the total renewable energy consumption in 2022 must increase from 8 billion gallons in 2008 to 360. Billions of gallons, the renewable energy defined by the bill is mainly bioethanol and biodiesel. After the rapid development of the US economy, according to the law of diminishing marginal propensity to consume, the increase in income has weakened the boosting effect on soybean oil consumption. In recent years, the annual consumption of soybean oil in the United States has remained at 13 billion to 15 billion pounds, and has lost its continuous growth momentum.