SunSirs: The Ethanol Market Experienced Narrow Fluctuations in November

Price trend:

According to SunSirs' commodity price analysis system, from November 1st to 28th, the average price of ethanol from domestic producers fell slightly from 5,560 RMB/ton to 5,304 RMB/ton, a decrease of 4.61% during the period, and a year-on-year decrease of 4.85%.

Market Analysis

Entering November, the domestic ethanol market continued its downward trend. The main influencing factors included: firstly, regional price trends for raw material corn, with prices remaining firm in major producing areas, providing some cost support; secondly, major factories purchased a large amount of grain in the previous period and were maintaining full production capacity, resulting in ample market supply; and thirdly, downstream chemical companies were mostly purchasing on demand and tended to seek lower-priced sources, leading to insufficient support from the demand side. 

From a cost perspective, corn prices rose slightly, and ethanol plants were making purchases based on immediate needs. The positive factors from ethanol costs were weakening.

On the supply side, the Northeast region performed exceptionally well, with an overall operating rate as high as 92.43%, significantly higher than the national average. Specifically, major enterprises in Heilongjiang continued to operate at overcapacity, and other factories that had resumed operations in the region also maintained near-full capacity production, jointly boosting the overall operating load in the Northeast. Several companies that had previously suspended operations recently resumed production, the ethanol supply negatively impacted the ethanol market.

On the demand side, for ethyl acetate, the plants of Anhui Huayi and Guangxi Jinyuan had restarted, while the Jingmen Qianxin plant experienced a short shutdown, and the Yanzhou Lunan and Yueyang Changde plants experienced fluctuations. The amount of production lost due to shutdowns exceeded the amount recovered from restarts, resulting in a slight decrease in ethyl acetate capacity utilization. These factors negatively impacted the ethanol market.

Market Forecast:

Enterprise production facilities were operating steadily, demand was limited, and prices were stable to slightly weaker. Analysts at SunSirs predict that the ethanol market will consolidate and weaken in the short term.

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