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 Q2 2018
Ethanol supply is expected to increase as Brazil’s new sugarcane harvest/crush season starts. US fuel grade ethanol supply is also expected to remain strong due to healthy corn harvests.
Buyers in northeast Asia are expected to increase buying activities after holding back purchases for last few months due to high prices. However, the outlook for China’s demand for ethanol imports could be more uncertain due to declining domestic prices and China’s proposal to impose higher tariffs on some US imports in retaliation for President Donald Trump’s steel and aluminium tariffs.
Supply for fuel ethanol is expected to remain higher than in previous years by most players. Additional imports from Central America could add further length to the market. Supply for industrial 99% ethanol is expected to be tight to balanced, while it will be higher for beverage 96% ethanol producers.
Demand for fuel ethanol is likely to increase as the driving season kicks in. Players say the situation will be clearer in June and July when a court ruling on US antidumping duties will have been announced and more time to soak up market length has passed. Demand for beverage 96% ethanol usually picks up in Q2, while demand from pharmaceutical markets for 99% industrial is also firm.
With start of the new 2018/2019 harvest/crush season in April, supply will increase and prices dip on rising supply. The sugarcane harvest in the centre-south, which accounts for 90% of Brazil's ethanol output, runs from April to November/December.
Prices during the second quarter will fluctuate 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.
Supplies of fuel ethanol will be constant to stronger due to robust corn production and new plants opening up in the producing Midwest region. As the winter months end, spring time should see an uptick in stocks and growth.
Demand for motor fuel should see growth over the previous first quarter, as travel picks up in the warmer months. Because first-quarter demand was about a half-million bbl/day higher in 2018 versus the same quarter last year, this notion should apply to the second quarter as consumer spending is expected to be up and retail fuel prices stabilised.
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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.