US ethanol spot prices jump 10 cents

11 May 2006 20:47  [Source: ICIS news]

HOUSTON (ICIS news)--Spot ethanol prices jumped 10 cents/gallon in some areas of the US between Wednesday and Thursday, traders said on Thursday.

Chicago barges were discussed selling at $2.80-2.85/gallon in Thursday spot transactions, more than a dime higher than last week’s assessment of $2.65-2.74/gallon from global chemical market intelligence service ICIS pricing.

Traders said New York Harbor spot ethanol coming in on barges from the Midwest were selling between $2.80 and $2.90/gallon, up from the $2.82/gallon previous high. Southern California’s main terminals in Los Angeles were said hitting the low $2.80s/gallon today and remained under upward pressure, sources said. 

Strong gasoline demand ahead of the summer driving season was said to be driving the increase as ethanol replaces methyl tertiary butyl ether in gasoline stocks as the primary oxygenate. Ethanol traders and blenders said supply was narrowly meeting demand but anticipated fundamentals would improve over the summer as the industry copes with the oxygenate switch.

Current US ethanol capacity is about 4.5bn gallons/year and there is another 2.2bn gallons/year of capacity additions under construction, according to the Renewable Fuels Association. Several of the units under construction are expected to be complete by late July, industry sources said.

Major ethanol suppliers include Archer Daniels Midland, Abengoa and Cargill.

By: Judith Taylor
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