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 Q2 2021
Ample availability of bioethanol fuel, industrial 99%, and beverage 96% volumes persisted across Europe through Q2. Material from Bulgaria and Hungary continued to supplement availability in the German and Italian markets as well as in northwest Europe. Signs of marginal tightness persisted in the French market due to the subpar sugar beet harvest of Q4 2020. Minor volumes of imported materials from South America and Pakistan added to the overall length in Europe.
Demand recovery in all segments of the ethanol market remained slow. Expectations of a robust resurgence in buying interest failed to materialise once lockdowns were eased. High bioethanol fuel inventory levels dampened spot buying interest. Beverage 96% demand was kept largely afloat through supermarket sales. Demand pull for industrial 99% fared much slower in comparison, as industrial-end consumers struggled to revive business post-lockdown.
Supply in Q2 gained incrementally amid resuming production following the start of the 2021/22 harvest season. Inventory recovery has been slower than normal as producers continue preferring sugar over ethanol. Drought conditions may reduce sugarcane feedstocks by 2.5-7.0% through the end of this season. Accumulated ethanol production from start of the harvest is about 13% lower than the same period in the prior season.
Domestic demand in Q2 remains lower than normal amid renewed lockdowns and pandemic led fuel demand losses. Demand for exports has been strong, in part due to better price parity from a significantly devalued Real. Anhydrous ethanol demand has been weaker than for hydrous ethanol. Anhydrous ethanol is blended into gasoline and hydrous ethanol competes directly with gasoline. Total ethanol sales through 1 June and are about 15% higher than the same period of the prior season.
Supply of fuel ethanol mostly rose in Q2 as plants were preparing for the summer driving season and the expected rise in demand. Elevated corn prices pressured producer margins and were a large factor in operating rates through the quarter. Industrial ethanol supply also rose as demand rose.
Demand for fuel ethanol rose as the summer driving season kicked off, resulting in demand remaining just below 2019 levels. The gasoline market continued to recover, pressuring refinery utilisation rates higher. Industrial ethanol demand also rose on a strong housing market.
Updated to Q2 2021
With the beginning of harvest season, supply saw some improvement, but the recovery was capped as more producers preferred to produce sugar and fuel ethanol instead due to better margins and market liquidity.
Demand was stable. Some downstream users adopted cautious attitudes and purchased on a need-to basis due to unstable supply and demand fundamentals. Cost pressure and knowledge of recovering supply also led to a wait-and-see attitude among importers, which further hinder the buying sentiment.
There was slow improvement in supply as producers gradually increased operating rates due to better demand from domestic markets. Expectations of increasing demand for fuel in summer also boosted market sentiment. However, due to cost pressure brought by feedstock prices, which were at a multi-year high, the upward trend was capped.
Demand for import cargoes in southeast Asia saw some improvement at the start of Q2 as certain domestic plants were shut for turnarounds. The upward price trend also boosted the buying sentiment of some traders. However, demand dropped later, due to surging COVID-19 cases in southeast Asia, which resulted in more travel restrictions and cautious attitude among end-users and traders. Recovering regional operations also weighed on buying sentiment.
We offer the following regional Ethanol analysis and news coverage to keep you informed of factors and developments affecting prices in the Ethanol marketplace.
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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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.
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