11 September 2012 06:10 [Source: ICIS news]
By Trisha Huang
The average price of etac from
The cost of ethanol, which is typically made from corn and tapioca in
Even as costs continue to mount, domestic supply of ethanol in
The prices of ethanol rose to yuan (CNY) 6,430-6,650/tonne ($1,014-1,049/tonne) EXW (ex-works) in eastern China for the week ended 7 September, compared with CNY6,150-6,450/tonne for the week ended 29 June, according to data collected by Chemease, an ICIS Service in China.
“Ethanol prices may rise again in September and October because of tight supply,” said a Chinese etac maker. “We may have to start importing ethanol to meet the domestic supply shortfall.”
The ongoing ethanol supply tightness since early July has curbed etac plant operating rates at several facilities in
Jiangmen Handsome Chemical Development in late August reduced its etac output in southern
The company switched an etac line at its 320,000 tonne/year etac/butyl acetate (butac) swing plant at Jiangmen in
Limited ethanol availability has similarly capped Jiangsu Sopo Chemical’s etac output at its 500,000 tonne/year plant at Zhenjiang in Jiangsu province at 50-60% of capacity since late August, which in turn reduced its domestic and export availability.
In the short term, supply of alcohol for industrial use is also facing competition from demand for edible alcohol, which is rising as distilleries build inventories to meet the anticipated demand for the Chinese Mid-Autumn Festival, which falls on 30 September this year.
Chinese etac makers have approached ethanol suppliers in countries including
“There has been a jump in the number of ethanol purchase enquiries from
“It would be difficult to meet the substantial rise in demand, because supply of tapioca chips from
Supply of Vietnamese tapioca has been curbed partly because of unfavourable weather conditions, the trader added.
“[Tapioca-based] ethanol may rise to about $800/cbm FOB
However, some buyers said there is limited upside to
Wuxi Baichuan Chemical Industrial is running its new 300,000 tonne/year etac/butac swing plant at
Shanghai Huayi has achieved on-spec output at its new 200,000 tonne/year etac plant at Wuwei in
Producers’ intensifying competition for the available etac export markets in South Korea, Japan, Taiwan and southeast Asia, together with comparatively stable local pricing in those markets, have hindered etac’s potential feedstock-led price increase.
Etac makers in
Below-average rainfall during the annual monsoon has partly caused a hike in sugar and therefore ethanol prices. Lower distillery operating rates during the monsoon have contributed to the shortage in ethanol supply.
Feedstock ethanol prices in September firmed to Indian rupees (Rs) 33-35/litre, about Rs1/litre higher than August. Ethanol prices in August increased by 10-15% from July.
Some producers said they expect ethanol costs to soften from an “uncomfortably high” level when crushing and production resume in November.
However, a producer added that below-average rainfall this year may result in a poor harvest, thereby keeping sugar molasses and ethanol costs at a high level.
While earlier talk of a “failing monsoon” has been eclipsed by heavier rainfall in recent weeks, “the damage has already been done”, said the producer.
It has been difficult to procure sufficient ethanol to run its etac plants at full rates, and Somaiya will make a decision to adjust its output level in the coming weeks, should ethanol availability remain limited, a company source said.
($1 = CNY6.34 / $1 = Rs55.44)
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