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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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Updated to Q3 2016
Ethanol prices were mixed from July to September as fuel-grade ethanol prices fell while anhydrous ethanol prices jumped to their best levels for the year. Toward the end of Q2, prices of fuel grade anhydrous ethanol were falling from the highs seen earlier, of around $560/cbm CFR SE Asia. The downtrend continued in Q3, with prices hitting a low of $470/cbm CFR SE Asia in August and was about $476/cbm near the end of Q3. The end of the US summer driving season freed up more supplies for exports and fuel-grade ethanol prices also tracked the seasonal decline in gasoline prices.
Hydrous ethanol prices traded up to 2016 highs around $595/cbm CFR SE Asia in Q3 and remain near those highs at the end of Q3. Prices for Brazilian origin hydrous ethanol have been supported by a stronger Brazilian currency while demand has been stable. SE Asian producers are still very much focused on supplying to their respective domestic markets and Pakistan-origin products available for exports have also been limited.
Updated to Q2 2015
Fuel grade ethanol prices in the Southeast Asia import market were largely stable-to-firm throughout April and May.
Higher feedstock costs and demand and stronger gasoline consumption during the driving season in the US placed upward pressure on prices.
In the Southeast Asian export market, limited cargoes were exported from Thailand as it was catering to its own domestic market. The domestic price in Thailand was higher than the international market, making exporting less attractive. Prices largely moved in line with developments in the Philippines market, the major importing country in the region.
The price direction in the Southeast Asian import market reversed from early June amid uncertainties in the US market. The US government had reduced the biofuel production mandates, which includes ethanol, under the renewable fuel standard (RFS). Low demand and ample supply placed pressure on prices.
Hydrous/B-grade ethanol in the Northeast Asia import market were stable-to-firm from April to early May, in line with movements of the Brazilian Real and the crude oil market.
From mid-May, prices were stable-to-soft on anticipated increased supply from Brazil following the first round of harvesting which started in April. Export prices of hydrous ethanol in the Southeast Asian market moved in line with Northeast Asia prices.
ICIS publishes a weekly report for Ethanol in Asia which contains price quotes for the anhydrous and hydrous grade product.
For the anhydrous grade, we get the import prices through the Philippines and also track prices from Pakistan. For the Hydrous grade; import prices to North East Asia and South East Asia are assessed.
These are prices for deep sea material usually arriving from Brazil. We work closely with our colleagues who cover the US and Brazilian markets to ensure we capture all the movements to Asia and help to provide global context to the regional market.
The report monitors shipping freights as it has an important role in influencing economical prices and a breakdown of fixtures and enquiries is included.
As the only weekly stand-alone publication on the Asia Ethanol market, the report offers a timely and objective round-up of the Asian business and the factors affecting the market.
We speak to traders and end users active in the market, closely cross-checking our detail to ensure our readers find our price assessments beneficial and a vital source of reference for their business.
ICIS collects pricing data on a wide range of chemical, energy and fertilizer products, including Ethanol. Our extensive experience in price reporting means we can offer you access to historical data dating back more than 20 years for certain commodities.
Our time series of pricing data enable you to build and model trends, to get a view of where markets might be heading. The data service includes charting functionality, allowing you to chart and download multiple data series for manipulation in your own internal models. You can also export data to Excel via the ICIS dashboard service.
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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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.