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 Q3 2019
Supply of anhydrous fuel-grade ethanol increased in Q3 as wet weather and high water levels in parts of the US eased. Hydrous ethanol supply from the US to major export markets still flowed but shipments to China dried up due to high import tariffs and some efforts to clamp down on the movement of cargoes via transshipment hubs in southeast Asia.
Demand decreased as the Philippines, the main export destination for US fuel-grade ethanol in southeast Asia, increased requirements for blenders to purchase locally produced ethanol under a quota system before they can import any material. The US-China trade war also hit buying sentiment and reduced trade flows even more even via unofficial back channels.
Ethanol supply grew in Q3 with the sugar cane harvest season in full swing, particularly in the centre-south region of Brazil. Despite the increase, the market may find itself undersupplied during the off season, requiring imports (WHEN IS THE OFF SEASON? IF THIS IS A LOOK BACK AT Q3, WHY DON’T WE KNOW WHETHER THE MARKET WAS OVERSUPPLIED OR NOT). Production of hydrous ethanol has been at more that 2bn litres per month in the Centre-South region, with sales rising more than 3% monthly. ***The centre-south region produced more than 2bn litres/month of hydrous ethanol, and sales rose at 3% per month***.
Demand for hydrous ethanol skyrocketed this year because in a price comparison, consumption of hydrous ethanol presents advantages over gasoline (WHAT DOES THIS MEAN?… IS IT, HYDROUS ETHANOL IS CHEAPER THAN GASOLINE?). Hydrous ethanol is used as a stand-alone fuel in flexible-fuel vehicles (FFVs), competing directly with gasoline. Anhydrous ethanol is blended in gasoline at a mandated 27%. With demand outpacing supply, market players predict ethanol shortages during the offseason. (AGAIN, WHY DON’T WHE KNOW… THIS IS SUPPOSED TO BE A LOOK BACK AT Q3 DEMAND)
Fuel ethanol and industrial ethanol production fell amid closures of some ethanol plants. Upstream corn stocks were expected to be tight heading into the third quarter, with crop forecasts offering little relief. Corn usage into ethanol fell, allowing corn stocks to build, but production of ethanol remains soft.
Fuel ethanol demand was strong early in the third quarter, but fell in September as the summer driving season ended and gasoline demand declined. A narrowing of the spread between ethanol and gasoline prices in September also discouraged demand. This volatility was partly offset by steady demand into the industrial, food and beverage sectors.
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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