ICIS' coverage of the Ethanol market is published weekly in Asia, Europe, Latin America. Price assessments cover anhydrous and hydrous grades in some regions, beverage and industrial grades in others.
Our market intelligence gathered by our locally based experts gives unbiased and independent commentary to support you making key commercial choices. In addition, there is Fuel Ethanol coverage in Europe giving weekly prices, news and analysis.
Our editor gives their expert view
Ethanol overview Transcript
The European ethanol market is a traditional one, and it covers the two main grades the 99% industrial, which is both synthetic and fermented and the 96% neutral beverage grade which is mainly based on molasses.
The market is generally quarterly based but there is also an element of monthly distribution and spot business. There are also some longer term contracts and they’re typically for the larger volume customers.
There’s also a 96% rectified neutral grade (REN) market which is a seasonal one and typically goes into the screen wash sector.
Other downstream sectors include industrial applications, cosmetic and pharmaceutical and also different beverage beverages as well.
The overall pricing trend has been firm particularly in the second half of this year, and this is due to: globally poor harvests; a resulting lack of imports; synthetic production problems and robust demand.
The future outlooks also set to be firm and increasing. This is due to the next harvest availability, due mid next year in Europe and also the renewable energy directive in Europe which is set to boost biofuel consumption by 10% by 2020. So this will have an additional burden on the traditional ethanol market.
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Ethanol: Market overview
Updated to Q2 2016
In Europe, the beverage and industrial ethanol market should roll steadily from the first quarter into the second quarter 2016, along with broadly steady contract pricing. Jockeying between suppliers, particularly in Germany where a new Cargill plant finally began serving the market, has added a soft trend in 96% grade pricing, and this could continue. Imports are expected to be modest.
In Brazil, ethanol prices dropped late in the first quarter of 2016 and the downtrend is expected to continue over the course of the second quarter, as supplies will be long with the 2016/2017 harvest and crush season having started early in April and likely to last until the end of the season in November/December.
In the US, while fuel ethanol spot prices have increased on strong gasoline blending demand, the latter demand may slide if ethanol remains at a premium to gasoline, as this can discourage refiners from blending and prompt them to buy renewable identification numbers (RIN) instead. In Asia, demand for ethanol imports is likely to soften. Oil companies in the Philippines are required by the government to lift from local ethanol producers before they can consider imports. Customers in Japan and South Korea are also likely to stay away, having fully covered their second-quarter requirements.
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ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
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Ethanol is a colourless, flammable volatile liquid, with characteristic odour and burning taste. It is miscible with water, ether, acetone, benzene and a wide range of organic products. Ethanol vapour mixes well with air, and explosive mixtures are easily formed.
The two major outlets for industrial ethanol are as a solvent and in chemical synthesis.
Ethanol is used as a chemical intermediate for the manufacture of ethyl acetate, ethyl acrylate, acetic acid, glycol ethers and ethylamines as well as other products. It is also used as an additive to food and beverages.
A large outlet for ethanol is as a fuel, oxygenate additive to gasoline and a gasoline extender.
In addition, ethanol can be used in perfume due to its light odour and quick evaporation.