18 May 2006 22:16 [Source: ICIS news]
HOUSTON (ICIS news)--?xml:namespace>
Bulk volumes traded at $3.05/gal in current New York Harbour business. Transactions were also said done at $3.10/gal in
Sources said on Thursday that uncertainties about supply dominated the ethanol market. Although ethanol producers and the Renewable Fuels Association have assured the industry repeatedly that present capacity production of about 4.5bn gal/year would be refreshed by new capacity adding 2bn gal/year, present demand appears to be rapidly outstripping ready supply. Market sources said there was strong interest in getting forward positions placed, again pointing to supply concerns by major players.
On the Chicago Board of Trade, June ethanol settled at $3.03 on Thursday, up 5 cents/gal over the previous settlement. July finished the day at $2.98, with August at $2.79. The August numbers are the first forward month to show a nudge down as the previous settlement was at $2.80. But sources said trading in forward strips was close to frantic as players strived to get material secured amid extremely skimpy supply and fragile logistics.
Major fuel ethanol producers include Archer Daniels Midland, Abengoa, Cargill, and Aventine Renewable Fuels, among others. Primary blenders seeking ethanol to replace methyl tertiary butyl ether (MTBE) include ChevronTexaco, Conoco Phillips, Citgo, Valero, and others.
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