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.
Updated to Q4 2018
Asia
Supply of anhydrous fuel-grade ethanol is expected to be sufficient with corn harvest in the US continuing at levels similar to the previous year. Hydrous ethanol supply also expected to rise as Brazil enters the final few months of the current harvest/crush season and as refiners continue to favour ethanol production instead of sugar due to low prices of the sugar globally.
Demand for fuel-grade ethanol imports into the Philippines is unclear especially as the Philippines government has been actively trying to support the domestic ethanol industry, which could possibly result in reduced ethanol imports.
Europe
Supply will increase towards the end of the quarter with sugar-beet based ethanol production. However, liquidity could decrease in October. Some imports were noted in early October and late September, but these petered off as Asian demand and prices attracted exports from Latin America, Pakistan and other production regions.
Demand for beverage and industrial material increases at this time of year as manufacturing is stepped up and drink and food companies prepare for festivities around December.
Latin America
The processing of the harvest/crush will continue as is normal for the seasonal nature of the industry. The sugarcane harvest in the centre-south, which accounts for 90% of Brazil’s ethanol output, runs from April to November/December. Supply will likely lengthen compared to previous years as producers are choosing to make more ethanol rather than sugar.
Demand during the quarter will depend on prices of competing gasoline prices. The country uses hydrous ethanol as a standalone fuel in flexible-fuel vehicles, 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.
Updated to Q3 2018
Asia
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.
Europe
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.
Latin America
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.
US
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.
We offer the following regional Ethanol analysis and news coverage to keep you informed of factors and developments affecting prices in the Ethanol marketplace.
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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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There are two main types of ethanol – fermentation and synthetic. The major outlets for industrial ethanol are as a solvent and in chemical synthesis.
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.
Ethylene
Acetic acid
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