FocusAsia hydrous ethanol to stay flat in Q4 on subdued trade

26 September 2012 06:14  [Source: ICIS news]

By Andrea Heng

sugarcane plantationSINGAPORE (ICIS)--Asia’s hydrous ethanol prices may see limited movement for the rest of 2012 as buyers have fulfilled their requirements up to the fourth quarter, market players said on Wednesday.

This marks an unusual trend in the hydrous ethanol market, which is usually bullish in the final quarter of the year.

“The current market trend is unlike what was seen in previous years. Compared with the previous year, prices are quite low and there’s little buying activity for the fourth quarter of this year,” a northeast Asian trader said.

Spot prices of hydrous ethanol have been unchanged at $670-690/cubic metres (cbm) (€523-538/cbm) CFR (cost and freight) NE (northeast) Asia since the end of August, according to data from ICIS.

Current prices are down by an average of 15.5% from end-2011 levels $800-810/cbm CFR NE northeast Asia in end-2011. Hydrous ethanol values peaked at $850-910/cbm CFR NE Asia in the fourth quarter of last year, according to ICIS.

This year, however, buyers were able to meet their yearend requirements by purchasing cargoes from traders – which have procured large volumes in the first half of 2012 – thus demand is expected to be weak in October to December.

“A major trader in Japan bought around 100,000 cbm of Pakistan-origin hydrous ethanol in the first six months and this volume was able to meet beverage producers’ needs,” another northeast Asia-based trader said.

At Ulsan in South Korea, while most of the large volumes have been liquidated, an estimated 30,000-40,000cbm is still available, said a southeast Asia-based trader.

But the remaining volume will easily be taken up by buyers who need to meet short-term requirements, the trader said.

“Discussions are now focused on shipments for the first quarter of 2013. Two major buyers have already purchased a total of 41,000cbm for delivery in January,” the trader said.

($1 = €0.78)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
Request a free ICIS sample report for the latest prices and development in the Asian petrochemical markets

By: Andrea Heng
+65 6780 4359

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