Price trend

According to SunSirs' commodity price analysis system, from January 12th to 16th, the domestic ethanol price fell to 5,411 RMB/ton, a decrease of 0.26% during the period, a decrease of 0.14% compared to the previous month, and an increase of 3.91% year-on-year. The domestic ethanol market showed a slight downward trend, with some regional differences. Major factories may reduce production, and inventory pressure at factories, coupled with favorable logistics conditions, could lead to further price declines.

From a cost perspective, the upward trend in corn prices and the resulting high cost of corn ethanol provided support for ethanol prices. Increased ethanol supply in the market, coupled with continued positive demand factors, suggests the possibility of further price increases for ethanol. However, the overall upward potential was limited due to high cost pressures, making profit improvement difficult. Bioethanol production remained unprofitable. Overall, cost factors were temporarily favorable for ethanol prices.

On the supply side, ethanol capacity utilization remained at 61.67%. Regarding edible ethanol production, Heilongjiang Hongzhan's operating load decreased, while Zhongke Green and Shenglong facilities maintained normal production. Wanli Fuel Ethanol reduced production, Jilin Dongfeng and Fukang facilities operated at three-quarters capacity (two lines running, one line stopped), Yushu facilities were in production, Xintianlong facilities reduced production, and Inner Mongolia Baiyecheng, Henan Houyuan, Hanyong, Huaxing, Sichuan Hongzhan, Shandong Qufeng, Huadong Huating, Longhe, and Guannan Xinguan facilities were shut down; Luomaite, Anhui Wanshen, and COFCO Fuel facilities were in production. Overall, the ethanol supply side was negative for the market.

On the demand side, demand for baijiu (Chinese liquor) and chemicals had improved, and end-user demand has increased, leading to an overall upward trend in demand. The demand for ethanol was also positive for the market.

Market outlook

Due to rising costs, there is a possibility of a decrease in ethanol plant operating rates. However, given the inventory levels, negative market sentiment, and limited downstream demand, SunSirs' ethanol analyst predicts that the ethanol market is likely to continue to decline in the short term.

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