Fuel ethanol arbitrage from US to Europe is open: sources

31 October 2013 11:15  [Source: ICIS news]

LONDON (ICIS)--The fuel ethanol arbitrage from the US to Europe is open, according to sources late on Wednesday.

Spot fuel ethanol prices in the US fell as a result of rising production, according to sources, and this means that the arbitrage from the US is either open, or close to opening.

“For the very short-term, the arbitrage from the US to Europe is open,” one source said.

“However, the time lag between order and delivery needs to be considered. It all depends on the time lag. I don’t think a lot of product will really come over. T2 [fuel ethanol prices] will go down towards T1 [fuel ethanol] replacement costs,” the source added.

“The arbitrage is definitely open and imports could be possible. It could exert downward pressure on prices as it’s not the best time for imports as demand is low,” another source said.

($1 = €0.73)

By: Sarah Trinder
+44 20 8652 3214

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