Likely ethylene price hike problematic for synthetic ethanol producers

25 July 2013 11:03  [Source: ICIS news]

LONDON (ICIS)--An expected rise in the August ethylene contract price is likely to put pressure on producers of synthetic 99% industrial ethanol, a producer of fermentation 99% industrial grade ethanol said late on Wednesday.

Synthetic ethanol producers use ethylene as a feedstock, and the August contract price is expected to increase on the back of high feedstock costs.

“The ethylene increase will be good for fermentation producers as it will put pressure on our synthetic competitors,” the source said.

“However, I don’t see them being able to achieve increases in the current market conditions – if they do, they could lose market share to fermentation producers,” the source said.

Fermentation producers use agricultural feedstocks such as sugar beet and wheat to produce ethanol.

“I tried to keep pricing flat for Q3 as we are projected for an ethylene price increase soon, which could bring a difficult few months,” one synthetic ethanol producer said.

($1 = €0.76)

By: Sarah Trinder
+44 20 8652 3214

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