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 Q3 2016
For Q3 2016, Asia’s demand for US-origin fuel-grade ethanol imports may strengthen as many domestic producers are expected to shut for turnarounds during the quarter. Demand for hydrous beverage-grade ethanol imports, mainly from Brazil, is expected to stay stable on the back of regular requirements from customers in Japan and South Korea.
In the US, falling corn prices are expected to pressure fuel ethanol prices lower in the third quarter of 2016. Corn prices have continued to fall since mid-June, amid beneficial weather conditions for corn crops. This trend is anticipated to continue into the third quarter, barring a major weather event.
Fuel ethanol spot prices trended higher over the second quarter, boosted by the return of the spring/summer driving season and subsequent demand for gasoline. However, this could potentially see a drop-off as the weather begins to cool.
Europe’s traditional ethanol market was anticipating stability, given the fairly balanced supply and demand. Increased capacity in Germany has boosted competition there. Falling fuel ethanol prices in early third quarter had taken the sting out pressure on industrial grade market. The UK’s ‘Brexit’ vote had the potential to have the biggest impact on the UK market into the third quarter.
Europe’s fuel ethanol market has a clouded outlook into Q3. Early third quarter values waned, puzzling some who had expected Q2 strength to roll into summertime’s typical uptick which is largely thanks to the summer ‘driving season’.
News & analysis
Ethanol news & analysis
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.
Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.
Over 25 years of reporting on key chemicals markets, including Ethanol, has brought global recognition of our methodology as being unbiased, authoritative and rigorous in preserving our editorial integrity. Our global network of reporters in Houston, London, Singapore, Shanghai, Guangzhou, Mumbai, Perth and Moscow ensures unrivalled coverage of established and emerging markets.
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.