Price trend

According to the SunSirs commodity market analysis system, overall supply increased, while raw material prices fell, resulting in insufficient cost support. This imbalance between supply and demand became apparent, with declining demand for liquor and rigid chemical procurement. The domestic ethanol market saw a volatile decline in August. From August 1st to 29th, the average price of ethanol produced by domestic producers fell narrowly from 5,677 RMB/ton to 5,580 RMB/ton, a 1.71% drop over the period and a 6.34% year-on-year decline.

Analysis review

At the beginning of the month, domestic ethanol market prices fluctuated within a narrow range, with favorable cost factors gradually waning. Supply showed slight regional variations, with both increases and decreases.

In early January, domestic ethanol market prices remained weak, with limited overall market transactions and declining factory quotes.

In mid-month, domestic ethanol market prices remained weak, factories were enthusiastic about shipping, and quotations were lowered.

In late August, domestic ethanol market prices remained weak, factories lowered quotations, new orders were limited, and factories were enthusiastic about shipping.

On the cost side, with costs declining, the opening price of raw corn in Northeast China may be higher than in previous years, but there is a possibility that prices open high and then fall. Henan corn will see concentrated supply, which will affect the price trend in Henan. Ethanol costs were also providing negative factors.

On the supply side, Hongzhan Laha, Heilongjiang, resumed production after a brief anhydrous ethanol shutdown in August. Bayan resumed production around the end of the month. The Wanli plant resumed production on August 5th, but fuel production had not yet reached full capacity. Heilongjiang Shenglong resumed production on August 21st of this month. Jilin Fukang's third and fourth lines resumed production on August 13th. The Yushu plant was shut down on August 5th. The Jietainuo plant in Inner Mongolia resumed general production around August 25th, but no anhydrous ethanol products were shipped. Shandong Qufeng started up its plant on August 29th. Huaxing resumed normal production after a brief shutdown in late August. Mengzhou Houyuan was operating at around 70% of capacity. The impact of ethanol supply was mixed.

On the demand side, downstream demand initially declined and then rebounded. Henan Shunda's ethyl acetate plant may resume production in September, while its ethylamine plant in Shandong was undergoing maintenance, as was the case in Zhejiang. The ethyl methyl carbonate plant in Shandong, which was shut down, may resume production in mid-September. With the arrival of the National Day and Chinese New Year holidays, demand for liquor is expected to increase. Pre-holiday chemical stockpiling is expected to lead to a pickup in demand in mid-September. Short-term ethanol demand is likely to provide favorable factors for the market.

Market outlook

Due to increased supply and low demand, domestic ethanol prices are expected to weaken in the short term. However, as pre-holiday stockpiling begins, prices may stabilize. Ethanol analysts at SunSirs predict that the short-term ethanol market will initially weaken and then stabilize.

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