14 November 2007 11:16 [Source: ICIS news]
By Charles Shaw
LONDON (ICIS news)--Market players in the European industrial 99% grade ethanol market are in disagreement over whether imports will supplement or flood the market in the medium term.
On the one hand, there are those who argue that countries such as
On the other hand, there are those, typically local producers themselves, who believe they will continue to dominate a European market which is becoming more “niche”.
“Imports will quickly become accepted as a normal part of the landscape,” said one major global ethanol supplier on Tuesday.
“People are starting to look for a reliable, fully integrated supplier,” the supplier added.
“Whereas imports used to be considered a threat, they are gradually being accepted [in
Imported ethanol has been knocking on
But, as one European producer explained, the fuel industry could play a pivotal role in the industrial market’s future.
“These days people are queuing up to supply fuel [ethanol] into
“However, the fuel price is still below that of industrial ethanol”, the producer continued.
“If the fuel price does not take off, the industrial market could seem a more attractive option,” concluded the source.
Some in the industry have highlighted French producer Tereos’ switch from synthetic to fermentation ethanol as an indication that the industrial market is on its way out.
“Tereos viewed the industrial market’s future as uncertain and decided to get out”, said one European distributor at the recent FO Lichts World Ethanol conference in
However, others take the view that Tereos’ shift was to do with it feeling more naturally inclined towards fermentation alcohol, it being fundamentally an agricultural, and not a chemical, company.
“Tereos switching does not mean anything”, said the same synthetic producer.
“Our decision was based on the fact that we are not a chemical company,” said a Tereos representative on Wednesday.
“We are an agricultural co-operative. We will serve the same customers, it is just that our raw materials have changed,” added the representative.
However, others emphasised that the threat of imports have always existed in
In addition to this, some underline the potentially off-putting issues that importers would face.
“Importing companies will have to look at the individual requirements of consumers,” said the European seller.
“The quality bar over here is continuously being lifted, and then there’s Reach (Registration, Evaluation, Authorisation and restriction of Chemical substances) to consider”, it continued.
Ultimately it seems much will depend on the fate of biofuels and the strategies of the big players. The current slow pace at which blending mandates are coming into force in
It will no doubt concern industrial alcohol producers too, although a degree of optimism on their side continues to shine through.
“We are fairly hopeful that this will remain our niche”, the seller said on Tuesday.
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