NEW YORK Jan 31 Renewable identification numbers (RINs) rallied on Friday morning as traders bought up the biofuel blending credits, sending ethanol RINs as high as 48 cents each.
The 48-cent trade, for 2013 compliance-year ethanol RINs, represents a 10-cent rise over Thursday's prices, when the credits traded for 38 cents each. Ethanol RINs for the 2014 compliance year traded in a similar range, traders said.
The credits had traded under 40 cents since early October, when a draft U.S. Environmental Protection Agency proposal to cut biofuel blending mandates was leaked and reported by Reuters and other news outlets.
The credits began to edge lower in the early afternoon, with both 2013 and 2014 compliance year ethanol RINs trading around 43 cents each, traders said.
It is unclear what sparked the rally. However, biodiesel RINs, which face uncertainty due to a $1-a-gallon biodiesel blender tax credit that expired at the end of December , led the rally with trades as high as 54.5 cents each for the 2014 compliance year, a trader said.
"Everything is a spread off of the bio 14," the trader said, referring to the 2014 compliance year biodiesel RINs. By contrast, 2013-year biodiesel RINs were seen trading in the same 43 cent range as ethanol RINs, indicating less uncertainty.
"The premium item is really the bio 14," the trader said.