Price trend

According to the SunSirs commodity market analysis system, domestic ethanol prices fell to 5,558 RMB/ton from September 5 to 12, a 0.29% decrease over the period, a 1.71% month-over-month drop, and a 6.41% year-over-year decrease. The domestic ethanol market remains weak, with falling factory quotes, weak overall demand, and rising corporate inventories, pushing ethanol transaction prices downward.

Analysis review

On the cost side, the circulation of old corn is low, while new corn is gradually coming onto the market. Currently, there's a gap between the harvest and the harvest in sales areas, resulting in firm quotes and a gradual weakening of prices in producing areas. Ethanol costs are providing negative factors for the market.

On the supply side, Heilongjiang Hongzhan Laha anhydrous ethanol production resumed after a short suspension, Bayan will resume production around the end of the month, the Wanli unit resumed production, Heilongjiang Shenglong will resume production this month, and Jilin Fukang's third and fourth lines resumed production. The Jietainuo plant in Inner Mongolia started producing general-grade ethanol around August 25, and the Qufeng plant in Shandong ignited on August 29. Huaxing resumed normal production after a brief outage in late August, and Mengzhou Houyuan is operating at around 70% of its capacity. Sichuan Hongzhan's plant remains shut down this month. Huating in northern Jiangsu, East China, maintains 50% of its capacity, and the Suchun unit has resumed production. The impact of ethanol supply is mixed. 

On the demand side, a divergent pattern is emerging: downstream chemical industries have recently experienced production cuts or delayed operations, while demand in the liquor industry has maintained moderate growth. Furthermore, logistics controls in some regions have limited product transportation and delivery efficiency. The demand side of ethanol is providing negative factors for the market.

Market outlook

Ethanol production has resumed growth, creating an imbalance between supply and demand, with supply exceeding demand. Downstream demand for liquor and chemicals is improving, and consumption is expected to improve. SunSirs’ ethanol analysts predict that the ethanol market will remain weaker in the short term.

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