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 2020
Europe
Supply remained critically tight in the traditional ethanol markets, consisting of industrial 99% and beverage 96% grades, due to the pull from the hand sanitizer and disinfectants sectors. Imports from Central and South America and Pakistan catered to the surging demand. A significantly delayed planned maintenance at the CropEnergies’ plant in Wanze, Belgium also impacted European fuel ethanol supply, which received supply respite from US imports.
Unprecedented demand for hand sanitizer prompted industrial 99% ethanol demand to grow nearly 10 times across France, Germany and Italy due to the pandemic. Beverage 96% production capabilities were also diverted to produce ethanol for hand sanitizer. Fuel ethanol demand fell dramatically across the region with the virus outbreak, but began to recover in the key French, German and Dutch markets from June.
Latin America
Latin America ethanol supply remained adequate in Q2 to start the 2020-21 harvest season. Producers have increased the proportion of sugar production amid pandemic-led fuel demand loss. Lower ethanol sales at the onset of the new productive season left producers with reduced cash to cover front-end costs. Ethanol inventory levels are high in both domestic and major export markets, limiting traded volumes.
Demand for hydrous ethanol remained stronger than anhydrous in Q2, while low prices maintain competitiveness with gasoline for most locations. Hydrous ethanol is used as a standalone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline. Anhydrous ethanol is blended in gasoline at a mandated 27%. Overall fuel demand loss resulting from pandemic mitigation efforts created excess inventory for distributors and drastically lowered sales of both grades for producers.
US
Supply of US fuel ethanol rose in the second quarter as demand hit new lows and producer margins were low or negative. Many producers shut or idled plants although this did little to offset the supply glut. Historically weak demand led fuel ethanol prices to plummet as drivers remained off the roads due to stay-at-home orders. Some fuel producers switched their production to industrial to aid in the hand sanitizer shortage.
Demand for fuel ethanol plummeted to historically low levels due to stay-at-home orders across the country and consumers hesitancy to travel. Demand for industrial ethanol reached record highs, although this did little to offset the impact from weak fuel demand. As large demand states are seeing spiking cases, demand is once again plummeting.
Ethanol (Beverage)
Asia
The market remained tight although supply increased slightly as the harvest season began in late April. Some producers switched to producing sugar instead of b-grade ethanol, as margins of sugar production were better.
Demand increased sharply. Besides the original demand from downstream beverage producers, the coronavirus pandemic led to a huge increase in demand from hand sanitizer producers as the original feedstock was too expensive to buy.
Ethanol (Fuel)
Asia
Supply dropped sharply in a muted market, as the coronavirus pandemic greatly hampered market sentiment while margins remained too poor for producers.
Demand decreased due to the coronavirus pandemic. Many countries announced travel restrictions, which hampered overall demand greatly. With the oil market crash, which resulted in cheaper gasoline prices, demand for fuel ethanol evaporated.
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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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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