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
Updated to Q1 2015
The outlook for first-quarter contract pricing in Europe for 96% beverage grade ethanol and 99% industrial grade ethanol is still unclear, although sources generally report stable-to-weak pricing. Imports remain limited because of low domestic prices and a weak euro versus the US dollar.
In Asia, anhydrous ethanol demand is expected to decline because of strong domestic capacity growth in the Philippines within Q1. Far East Alcohol Corp and Kool Company, both based in the Philippines, have outfitted their plants with equipment that would enable them to produce anhydrous ethanol locally.
US industrial ethanol prices may feel pressure from weaker energy markets in Q1. Sources said the flu season has bolstered demand, with significant demand from Mexico as result of labour issues.
Brazilian ethanol prices are expected to firm throughout Q1 as the 2014/2015 harvest and crush season ended in December 2014. As the crush ends, prices firm as inventories are drawn down until the start of the next crush season. The sugarcane harvest in the centre-south, which accounts for 90% of Brazil's ethanol output, runs from April to November/December.
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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.