North China used cooking oil prices have flipped back to a premium to UCO FOB Malacca Straits for the first time in over a month, with Chinese buyers’ procurement ahead of the Lunar New Year holidays driving a strong rebound in prices over recent trading sessions.
At the same time, Straits UCO market sellers have been adjusting offers down amid a strengthening of the Malaysia ringgit against the US dollar, which has surged to multi-year highs, discouraging exports.
Platts, part of S&P Global Energy, assessed UCO FOB North China at US$1,071/mt on Jan. 27, up US$21/mt on the day, and at a US$26/mt premium to UCO FOB Straits, which was assessed down US$5/mt at $1,045/mt.
UCO FOB Straits had been trading at a premium since Dec. 9, when Platts assessed it at US$1,060/mt against US$1,040/mt for UCO FOB North China.
An Asia-based UCO trader said that Chinese UCO suppliers are now willing to stock up and that UCO prices in China have increased, attributing the price rise to higher local logistics costs and the upcoming holiday.
A Straits-based trader shared a similar view, noting that some participants are restocking early in anticipation of reduced activity during the February holiday period.
