Darling Ingredients Inc. rose the most in 14 months as a rebound in waste fat prices — a key biofuel ingredient — stokes optimism for improved profits later this year.

Increasing demand for the low-carbon feedstock is helping lift prices from depressed levels seen over the past several months, signaling stronger earnings for Darling in the second half of the year, said Chief Executive Officer Randall Stuewe. Shares of the company rose as much as 9.1% for the biggest intraday advance since May 2023.

The US has been flooded with imports of cattle tallow, a form of waste fat, as producers overseas seek to reap the benefits from the biofuels boom. Increased supplies of the ingredient, which is also used in animal feed, have weighed on prices, eroding profits for companies such as Darling. 

Darling reported second-quarter earnings of 49 cents a share, beating the average of analyst estimates compiled by Bloomberg. That still trailed the year-earlier profit by more than 68%.