Price trend

According to the commodity market analysis system of SunSirs, from February 6th to 13th, the domestic ethanol price rose to 5,444 RMB/ton, an increase of 0.57% during the period, a month-on-month increase of 0.48%, and a year-on-year increase of 5.97%. The rise in domestic fermentation ethanol prices was mainly driven by the following factors: First, the supply from major factories decreased, and regional supply tightened; second, with the approach of the Spring Festival, downstream and intermediate links released their restocking demand, and the pace of restocking accelerated; third, raw material costs remained high, providing strong support for prices; and fourth, factories had a strong willingness to raise prices, further consolidating the upward trend.

Market  Analysis

From a cost perspective, the high price of corn, a key raw material for bio-fermented ethanol, provided strong cost support. Meanwhile, significant pre-holiday stockpiling demand from downstream chemical companies and intermediaries further drove up prices. Overall, the cost of ethanol was positive for the market.

On the supply side, ethanol plants that reduced or shut down may resume production, while major plants may maintain low-load production due to cost pressures. The ethanol supply side was  favorable for the market.

On the demand side, downstream chemical production was resuming, potentially increasing demand. Overall downstream demand for ethanol was rising. In summary, ethanol plant inventories were expected to continue decreasing. The demand side for ethanol was positive for the market.

Market Outlook

Ethanol prices rose more than raw material prices, narrowing losses in ethanol production profits. According to analysts at SunSirs, the ethanol market is expected to consolidate after the holiday.

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