RIN prices climb to new heights

By Chris Hanson | July 25, 2013

Prices for renewable identification numbers (RINs) for ethanol increased to $1.46 per gallon on July 18.

Scott Irwin, the Laurence J. Norton Chair of Agricultural Marketing, and Darrel Good, professor emeritus at the University of Illinois at Urbana-Champaign, reported in their FarmDocDaily post, “RINs Gone Wild?,” the rise of RIN prices raises several questions. In their analysis they used models to examine the relationships among interacting factors to determine their relative importance for both ethanol and biodiesel.

The recent rise in RINs prices has several implications, they said. First, it suggests the E10 blendwall is or will becoming tightly binding. Second, the rise signified market participants do not expect the blendwall to be breached with higher ethanol blend uses. Third, market participants do not expect a change in RFS rules for the coming year. Lastly, it demonstrates the pressures of meeting the RFS renewable mandate.

The market is volatile, though. On July 24, D6 RINs had dropped about 15 percent to $1.23 per gallon, according to Atlas Market's daily price indications, and on July 25 dropped even further to 96 cents.