NewsFlashUS fuel ethanol spot prices jump 8%

18 May 2006 22:16  [Source: ICIS news]

HOUSTON (ICIS news)--US fuel ethanol prices jumped 8% between Wednesday and Thursday, a trading source confirmed on Thursday.

Bulk volumes traded at $3.05/gal in current New York Harbour business. Transactions were also said done at $3.10/gal in New York Harbour. Previous assessments by global chemical market intelligence service ICIS pricing put the high end of the New York Harbour spread at $2.82, making the current rise an 8% jump. Sources said Midwest plant spot prices jumped 20 cents/gal, on Wednesday and Thursday, surging from $2.73 to about $2.93, a 6% boost.

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.

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