Posts by Hoekstra Trading LLC

Will it ever end? What’s the effect on RIN prices? What’s the cost? The acronym SRE is something you will see a lot if you follow the world of renewable fuels and Renewable Identification Numbers (RINs). SRE means Sustainable Revenues for Expensive lawyers. It involves a dispute about Small Refinery Exemptions granted during the Trump…

Hoekstra Trading’s Attractor RIN price model is a spreadsheet that calculates the theoretical value of the D4 Renewable Identification Number (RIN) and enables the user to study theoretical vs. market RIN prices. The theoretical value is calculated using Hoekstra Trading’s spreadsheet application of the Irwin-McCormack-Stock (IMS) equation which is based on fundamental economic theory The…

The question and answer segment of Darling Ingredients’ Nov 8, 2023 earnings conference call was dominated by questions about the outlook for renewable diesel margins. This focus was triggered by last quarter’s 50% D4 RIN price nosedive and a corresponding nosedive in Darling’s stock price as seen on the right hand side of this 2-year…

The recent nosedive in the price of Renewable Identification Number (RIN) credits, from $1.60 to 80 cents, has financial analysts asking refining executives how falling RIN prices might affect their future profits. For example, from last week: How do you see the RIN dynamics impacting your renewable product sales margin considering the renewable volume obligation…

Last week financial analysts asked refining executives about the nosedive in the D4 Renewable Identification number (RIN). From responses to this week’s questioning: Read more blogs in this series, RIN Price Nosedive: Below are 3 excerpts, from Neste and Valero’s 3rd quarter earnings conference calls: 1. Question from Peter Low, Financial analyst, Redburn Atlantic Hi,…

Hoekstra Trading’s “D4T” value is the calculated theoretical price of a D4 RIN using an equation published by Scott Irwin, Kristen McCormack, and James H. Stock (IMS) in 2020. It is a theoretical, not a market value, that is calculated using Hoekstra Trading’s best estimate of the values of the variables and parameters of the…

See the other posts in this series, Top 3 Takeaways: 2021, 2022, 2023, 2024 2023’s top 3 takeaways from Hoekstra Trading’s perspective: Recommendation Anyone with a stake in RINs pricing and economics should get Hoekstra Research Report 10 which includes this Hoekstra IMS RINs pricing spreadsheet that accurately calculates theoretical RIN prices, tracks them versus…

In late July, 2023, the D4 Renewable Identification Number (RIN) credit price started nosediving from $1.60 on July 25 to $1.00 on September 25.  The D4 RIN is part of the regulatory system that sets and ensures compliance with mandates on the supply of renewable fuel components in diesel fuel in the United States.  Read…

The actual price (gold) and model price (black) agreed closely in the first half of 2022. Then the model began a steady downtrend to half its peak level. The actual market price has followed this trend with a lag and a much lower slope, forming a growing gap between the theoretical and actual prices.