Europe fuel ethanol values fall on improved supply

27 September 2012 10:26  [Source: ICIS news]

LONDON (ICIS)--European T2 fuel ethanol values have fallen by €97-107/cubic metre ($124-137/cbm) in the past two weeks as a result of improved supply, sources said late on Wednesday.

According to ICIS data, European fuel ethanol prices were at levels of €757-777/cbm FOB (free on board) Rotterdam on 12 September.

However, by the 26 September, values had plummeted to €660-670/cbm FOB Rotterdam.

Sources say an open arbitrage between the US and Europe has allowed imports to enter the market, relieving pressure on previously tight supply.

Although imported US fuel ethanol predominantly goes to markets such as the UK, the Netherlands and Finland, sources say availability has eased.

“Values have come off very hard,” one source said.

“Imports entering the market are putting downward pressure on prices. The arbitrage is wide open,” it added.

Fuel ethanol values are currently backwardated throughout the fourth quarter. However, with feedstock costs still at high levels, it is not known whether producers can sustain further decreases.

($1 = €0.78)

By: Sarah Trinder
+44 20 8652 3214

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