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
Brazil ethanol spot prices declined as the sugarcane harvest in the key centre-south region started in the second quarter. The region accounts for 90% of Brazil’s ethanol production and the harvest runs from April to November/December, when ethanol demand is expected to strengthen.
The Brazilian government announced a stimulus package for ethanol producers in a move to boost production and investment in the sector. Brazil has also increased its anhydrous ethanol-blending rate in gasoline to 25%.
Increased demand will only fuel ethanol prices to the point where the biofuel is no longer competitive with gasoline, as drivers normally switch to gasoline when that happens. Hydrous ethanol is used in Brazil as a standalone fuel in flexible-fuel vehicles (FFVs), while anhydrous ethanol is blended in gasoline at a mandated 25%.
European fuel ethanol values are expected to remain firm throughout the summer, as higher demand is anticipated with the approach of the summer driving season.
Supply has tightened as a result of antidumping duties being imposed on imports of US origin, together with low levels of production at some European plants.
Updated to mid-May 2013
News & analysis
Ethanol news & analysis
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.