Ethanol Prices, markets & analysis
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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
Initial feedback from the European 96% beverage grade and 99% industrial grade ethanol markets suggests stable-to-weak contract pricing for the second quarter.
Producers said rising feedstock costs and healthy offtake should result in price increases but that healthy supply is undermining levels.
Weak corn prices pushed US industrial ethanol contracts down by 10 cents/gal in the first quarter.
Meanwhile, severe winter weather has also kept ethanol supplies stranded in certain regions.
There has also been strong demand from hand sanitizers and anti-bacterial sprays, as a result of a strong flu season.
Sources said they expect increases beginning in the second quarter of 2014.
Anhydrous ethanol spot prices are expected to remain volatile as supply from US and Brazil remains uncertain. Inclement weather conditions, coupled with volatile feedstock costs, caused uncertainty on market outlook.
In the hydrous sector, spot prices are likely to firm on stable demand amid reduced supply from key exporter, Brazil.
Updated to mid-April 2014
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Ethanol news & analysis
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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.