Price trend

According to SunSirs' commodity price analysis system, from February 2nd to 6th, the domestic ethanol price rose to 54,113 RMB/ton, representing a 0.19% increase during the period, a 0.32% decrease compared to the previous month, and a 5.37% increase year-on-year. The domestic ethanol market showed a slight upward trend, with some regional variations. Driven by rising raw material prices, domestic ethanol manufacturers increased their quotations.

Market analysis

From a cost perspective, the high price of corn, the raw material for bio-fermented ethanol, provided strong cost support. Simultaneously, significant pre-holiday stocking demand from downstream chemical companies and intermediaries was also driving up prices. Overall, the cost factors for ethanol were favorable.

On the supply side, major factories in Northeast China generally reduced production. Taking Heilongjiang Hongzhan as an example, its production load had decreased significantly, and the overall operating rate of its four factories had dropped to about 40%. This indicates a generally favorable supply situation for ethanol.

On the demand side, demand was active, with downstream and intermediate buyers actively stocking up before the holiday.  Demand in the chemical sector remained stable. Driven by the "buy on the rise, not on the fall" sentiment, market transactions were robust. The rapid pace of factory shipments further strengthened market expectations of rising prices, providing support for price increases. Overall, the demand side provided positive factors for ethanol market.

Market outlook

With strong support from the cost side and factories maintaining low operating rates, coupled with restocking demand from downstream businesses after the holidays, analysts at SunSirs predict that the ethanol market will mainly consolidate and remain in a wait-and-see mode in the short term.

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