Price trend:

According to the commodity market analysis system of SunSirs, from November 3rd to 7th, the domestic ethanol price was 5,248 RMB/ton, a decrease of 5.61% month-on-month and 5.76% year-on-year. The domestic ethanol market continued its downward trend. Key influencing factors included: regional trends in raw material corn prices, with prices in major producing areas remaining firm, providing some support for costs; major factories having previously purchased a large amount of wet corn, temporarily maintaining full-capacity production, resulting in ample market supply; and downstream chemical companies mostly purchasing on an as-needed basis and tending to seek low-priced sources, leading to insufficient demand support.

Market Analysis

From a cost perspective, the speed of grain outflow from Northeast China, the ongoing impact of grain quality issues in North China, and the willingness of downstream enterprises to build up inventories collectively dominated short-term regional price trends. Recently, Henan, Shandong, and other regions began consuming grain from Northeast China, and delivery prices had risen due to tightened logistics and regional supply and demand. The favorable factors from ethanol costs had weakened.

On the supply side, Northeast China performed exceptionally well, with an overall operating rate as high as 92.43%, significantly higher than the national average. Specifically, major large enterprises in Heilongjiang Province continued to operate at overcapacity, and other factories in the region that had resumed operations were also basically operating at full capacity, jointly driving up the overall operating load in Northeast China. Several previously shut-down enterprises recently resumed production, creating a slightly bearish factor from the ethanol supply side.

On the demand side, downstream chemical demand, taking ethyl acetate as an example, was increasing. Anhui Huayi's plant had resumed production, which would lead to a short-term increase in operating rates. Furthermore, withcost reductions resulting in profits for factories, their production incentives were high, leading to increased ethanol consumption. Overall, the demand of ethanol provided favorable factors for the market.

Market outlook

With weakening cost support, increased supply, and gradually recovering demand, analysts at SunSirs predict that the ethanol market will mainly fluctuate in the short term.

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