The first quarter is typically when the European fuel ethanol market experiences weaker values, as a result of seasonally lower levels of demand. However, this pattern has not been evident during the first quarter of 2013, as a result of fewer imports and reduced domestic production.
Demand for US material has dwindled in Europe following the European Commission’s investigation into allegations that US fuel ethanol was dumped in Europe, with market participants concerned about the possibility of retroactive import duties being introduced.
Some sources said this put the market in a tight balance, whereas others believe that stockpiles of US material remain in the European market, easing any supply constraints.
In February, the European Commission confirmed that it would be implementing a €62.90/tonne import duty on US ethanol imports as of 23 February. Not only did this put slight upwards pressure on T1 fuel ethanol prices, but it also lent support to T2 fuel ethanol values.
Further lending support to values was lower domestic production in Europe, following the temporary closure of Abengoa’s 127m gallon/year plant in Rotterdam for three months in December, to carry out environmental improvements.
Updated to mid-February 2013