Unlike ethaol producers, bio-diesel producers do split some of the RINs with the distributors.
Has anyone looked at the dip in RINs this week, affter the EPA came out with 2013 targets numbers and a statement that they will look at how to address the 'Blending wall'.
This impacts REGI in 2 ways: some of their RINs on the balance sheet will decrease in value. REGI try to sell as soon as they create the RINs. So this part may be a small hit.
But the 2nd impact is the reduced income on future volume.
Assumming a) REGI keeps 50% of each RIN
and each RIN is 1.5 the value of RINs.
a 10c decrease in RIN is a 15c decrease in value and 7.5c per gallon decrease in revenue.
Can anyone confirmhow much RINs Regi 'usually' carry n its book. They did say that they try to sell the RINs as soon as they have them.... but dud to their high volume of production,and the pipeline to the distributors, they have some RINs in the pipeline going out the door...
RINs went from 1.40 to 80's in no time ( less than 3 days). No time to correct/ to liquidate.
With the $1/tax credit Regi is still profitable. The questions here are :
o how much to substract for RINs on the books from 2Q? ( if any)
o how much is bottom lineEBITDA with RINs at 80-90 cents/gallon?
With corn production being reconfirmed, D6 is going back to low figures---sooner than we think ----