06 June 2013 10:11 [Source: ICIS news]
LONDON (ICIS)--European T2 fuel ethanol values softened this week amid healthy supply and lower levels of demand, sources said late on Wednesday.
T2 values were at €635-640/cbm ($836-842/cbm) FOB (free on board) Rotterdam, down by €5-10/cbm compared with the previous week, according to ICIS data.
Sources have said that market supply has improved since tight conditions in May, with 15,000cbm of fuel ethanol due to arrive in Europe from Central America.
Abengoa is believed to have restarted its 127m gallon/year plant in Rotterdam, the Netherlands, as sources have said the producer is no longer buying product during open market trading to cover its obligations.
“There’s no way Abengoa isn’t running,” one source said.
Abengoa was unavailable for immediate comment.
In addition, another source said that a number of buyers are now covered for product.
“There’s lower demand as everyone has covered their positions,” the source said.
Sources have said that price decreases at this time of year are slightly unusual, as demand is usually on the increase as the summer driving season approaches.
However, ethanol remains expensive compared with gasoline, meaning there is less demand for blending. Furthermore, a prolonged winter and recent wet weather across parts of Europe have served to lower demand for fuel in general, as consumers tend to drive less during bad weather.
($1 = €0.76)
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