SunSirs: The Ethanol Market Was Fluctuating and Trending Weaker

Price trend

According to SunSirs’ commodity market analysis system, as of April 24, domestic ethanol prices had declined to 5,930 RMB/ton. During this period, prices fell by 0.27%; on a month-on-month basis, they dropped by 0.67%, while year-on-year, they rose by 12.52%. Domestic ethanol prices exhibited a weak downward trend, with manufacturers demonstrating a strong willingness to ship and a distinct eagerness to aggressively secure orders. Influenced by rising freight rates, some manufacturers opted to absorb a portion of the costs to benefit the logistics sector. Downstream chemical enterprises limited their purchasing to immediate, essential needs, resulting in a corresponding decline in delivered prices.

Market analysis

Regarding the cost landscape—specifically from the perspective of inputs—raw corn prices initially trended lower before strengthening. As temperatures rise, the willingness of grassroots farmers and traders to sell their grain has increased, leading to an expansion in market supply. Consequently, cost-side factors are currently exerting a bullish influence on the ethanol market.

From the perspective of supply, major production facilities in the Hebei and Henan regions remain in normal operation; however, operating rates at cassava-based ethanol plants in East China remain relatively low. Regarding coal-based ethanol, operating rates at the Yushen facility are subdued, while plants in Hunan and Hubei remain offline; production in other regions continues as normal. Overall, the ethanol supply landscape is currently influenced by factors leaning toward the bullish side.

On the demand side, regarding downstream ethyl acetate operations within the chemical sector: the ethyl acetate units at Henan Ruibai and Jingmen Qianxin have shut down, bringing the overall operating rate for ethyl acetate production to 51.57%. There has been some restocking activity recently, with other downstream chemical sectors engaging in restocking to meet essential needs. The downstream *Baijiu* (Chinese liquor) sector is currently purchasing to meet immediate requirements, though it is on the verge of entering its traditional off-season. Consequently, the impact form ethanol demand is mixed—presenting both positive and negative aspects.

Market outlook

As corn inventories gradually decline, corn prices are likely to rise in the near future, thereby providing support to the cost side of ethanol production. Analysts at SunSirs anticipate that the ethanol market will primarily undergo a period of consolidation.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.