Alto Ingredients Inc (ALTO)

[Mortenm]

Thanks for the answer!

So if ethanol price > blended gasoline price = RIN has a negative value, assuming that RIN price is the spread between demand price of blended gasoline and ethanol price.
Higher ethanol prices is offset by lower RIN prices, unless gasoline prices increase - then RIN prices remain the same or increases.
Lower ethanol prices is offset by higher RIN prices, unless gasoline prices drops - then RIN doesn't increase.

I know this is a crude understanding, however, one thing seems clear.

Price for blended gasoline is the big driver here.

Price for blended gasoline is not necessarily positive correlated with ethanol prices, but may in fact be positive correlated with RIN prices.

So in terms of revenues, we (PEIX) want gasoline prices to increase (in addition to ethanol prices of course) so that we secure more revenue on RINs.

Finally, bio-gasonline (whatever) and cellulose with RIN factors of 1.5X and 2.5X will dillute the RIN market, and push down prices even more.

Am I totally wrong in my understanding?