China's domestic ethanol market has shown narrow fluctuations, with the benchmark price holding at 5,550 CNY/ton. From September 19 to 26, prices dipped by 1.10% week-on-week, reflecting a cautious market, while a year-on-year decline of 4.08% indicates ongoing softness compared to 2024. Regional dynamics reveal pre-holiday restocking in some areas, particularly for corn-based ethanol, driving slight price upticks. However, logistical constraints have limited supply chains, forcing reliance on local inventories, which has kept price movements subdued.

Cost Dynamics: The cost side presents a mixed picture. New grain supplies are hitting the market, creating regional variations in raw material prices. While this supports ethanol production in some areas, cost pressures remain due to localized grain price volatility, balancing potential gains with risks.

Supply Overview: Ethanol supply is stable but uneven. Facilities like Heilongjiang Hongzhan Huannan and Shenglong operate normally, though some, like Jilin Dongfeng and Sichuan Hongzhan, are offline. Maintenance and reduced output at plants like Laha affect supply, with an estimated 20-30% of listed facilities under maintenance or halted. Shenglong’s planned line switch in October could further influence supply dynamics.

Demand Trends: Demand is a bright spot, with terminal sectors recovering and solvent industries increasing operational loads. White wine producers are ramping up for the holiday season, boosting edible ethanol demand. This uptick in consumption supports a cautiously optimistic outlook.

Outlook: Pre-holiday restocking is driving active factory shipments, SunSirs predict a short-term price uptrend, potentially reaching 5,600-5,700 CNY/ton. However, logistical bottlenecks and raw material cost volatility could cap gains. Looking ahead, October’s new grain influx may ease supply constraints, but sustained demand will be key to price recovery. Investors and stakeholders should monitor regional logistics and production schedules closely to navigate this delicately balanced market.

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