Demand on Gulf, East coasts drives ethanol prices

02 May 2006 23:00  [Source: ICIS news]

HOUSTON (ICIS news)--Ethanol producers said on Tuesday that Midwestern spot prices were higher due to higher shipments to the Gulf and East coasts for gasoline blending.

Most US ethanol production is in the Midwest and has given those states lower ethanol prices due to proximity to the source. But industrial ethanol players said on Tuesday that this has changed due to the push to get enough ethanol shipped into the East Coast - where about 90,000 bbl/day are consumed - and into Texas and the US Gulf Coast, soaking up around 40,000 bbl/day.

With such large quantities moving out of the Midwest, sources said spot ethanol prices were higher. Midwest FOB prices were confirmed trading spot ethanol placements in the $2.60s/gal on Tuesday. ICIS pricing assessed the Midwest FOB range at $2.53-2.63/gal, with Chicago terminals in the $2.55-2.64/gal range. These values represented increases of as much as 4% above the previous week.

Fuel ethanol prices clustered in the $2.40s/gal in the Midwest during February and March but climbed to present levels in April due to refiners' rush to replace methyl tertiary butyl ether (MTBE) with ethanol in order to meet the 6 May deadline for the Renewable Fuels Standard.

Major US fuel ethanol producers include Archer Daniel Midland, Cargill, Abengoa, and Aventine Renewable Energy.

By: Judith Taylor
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly