SunSirs: The Ethanol Market Was Experiencing a Narrow Range of Price Fluctuations

Price trend

According to the commodity price analysis system of SunSirs, from January 4th to 9th, the domestic ethanol price rose to 5,430 RMB/ton, an increase of 1.35% compared to the previous period and a year-on-year increase of 4.43%. The domestic ethanol market saw increases in both supply and demand. The cost of fermented ethanol remained high, limiting the upward price movement.  Improved terminal demand and short-term cost advantages are expected to continue, but with inventory reduction in major production areas, the market is expected to trend stable to slightly weaker in the future.

Analysis and Commentarys

From a cost perspective, corn prices continued to rise overall. Increased purchasing prices at northern ports stimulated deliveries, and futures prices also rose. Production areas followed the price increases at northern ports and in the futures market, with gains of 10-30 RMB/ton. Grain deliveries to collection points remained limited, and farmers' willingness to sell was still generally low. These factors from costs represent a positive influence on ethanol market.

On the supply side, Heilongjiang Hongzhan's edible ethanol production decreased, Zhongke Green is in production, Shenglong's plant is operating normally, Wanli Fuel Ethanol reduced production, Jilin Dongfeng is in production, Fukan's plant is operating on lines three and four, line two is shut down, Yushu's plant is in production, Xintianlong's plant reduced production, Inner Mongolia Baiyecheng's plant is in production, Henan Houyuan is in production, Hanyong's plant is in production, Huaxing's plant is operating normally, Sichuan Hongzhan, Shandong Qufeng, and Huadong Huating are in production; Longhe and Guannan Xinguan are shut down; Luomaite, Anhui Wanshen, and COFCO Fuel are in production. The ethanol supply side provides bearish factors for the market.

On the demand side, for downstream ethyl acetate, the Yanzhou Mining Lunan plant resumed operations after a period of reduced output, and the Henan plant increased its operating rate, while the Guangxi Jinyuan plant was shut down. The capacity utilization rate of ethyl acetate increased slightly. These factors had a generally positive impact on ethanol demand.

Market Outlook 

In summary, SunSirs’ ethanol analyst predicts that the ethanol market will experience narrow fluctuations in the short term.

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