A few updates from the intersection of RINs and ethanol. It’s starting to look like there have been physical market reactions to the rising price of RINs.
First of all, the price of RINs, after being enormously volatile a few weeks ago, has quieted down. The price of 2013 corn ethanol RINs has stabilized near 75-80 cents per RIN, though it moved up to almost 90 cents on Tuesday before an EIA report showing rising ethanol output — which if the RIN is ultimately separated from the ethanol by the latter being blended — was at a nine-month high. This is far less than the peak levels of more than a dollar of a few weeks ago, but obviously a lot more than the price of 2012 RINs at the start of the year (before 2013 started trading) of just a few cents. The expectation is that until the EPA finalizes its proposed Renewable Fuel Standard mandate for 2013, the market will mostly bide its time.