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.
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Ethanol: Market overview
Updated to Q3 2018
supply from Brazil increases but supply from Pakistan tightens due to most sellers having sold all their stockpiles. US fuel ethanol supply expected to be stable as harvest continues. Market to eye trade tensions and higher tariffs in US-China dealings.
Asia’s demand for US-origin fuel-grade ethanol imports are forecast to remain tepid as the Philippines looks to further support its domestic ethanol industry. China and India were heard to be increasing demand for fuel ethanol imports but rising trade tensions with the US could counter that.
Supply for fuel ethanol could fall in the coming quarter, but this is unlikely to have a major upward impact on prices unless prolonged maintenances or unplanned incidents interrupt production. This is because volumes are still likely to be high relative to demand, which itself could fall at the end of the quarter.
Growing year-on-year demand in some countries will not prevent some price volatility; higher supply relative to demand continues to make this a buyers’ market. At the end of the third quarter, the second quota-free harvest begins, so players will be looking at 2019 supply expectations. This could also have a peremptory impact on prices as demand drops after the driving season.
Brazilian ethanol supply during the third quarter will increase in line with the seasonal progression of the 2018/2019 sugarcane harvest/crush which started in April. Excluding rainy weather, which slows processing, crushers will increase processing every week in line with seasonal norms. The sugarcane harvest in the centre-south runs from April to November or December.
Demand will be mixed during the third quarter as the country uses hydrous ethanol as a stand-alone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline. Many Brazilian drivers own flex-fuel cars which allow switching from gasoline to ethanol. Drivers only substitute for ethanol if its price is less than 70% that of gasoline.
Fuel ethanol production is projected to continue growing, as production in the Midwest continues to strengthen to keep up with robust demand. Industrial ethanol supplies will tighten heading into the second half as acres dedicated to harvest production at the farm dipped and contract prices rose as a result of increased fuel and transport costs, according to producers.
Fuel ethanol demand will be robust but mostly steady, led by high gasoline demand in the US. However, demand pullback from US drivers due to rising gasoline and crude oil prices may tamper some consumption levels. Steady downstream demand in the industrial sector will keep demand mostly steady.
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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.
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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.