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 2019
Supply of anhydrous fuel-grade ethanol increased due to healthy corn supplies. 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 imports of US 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 dampened buying sentiment and reduced trade flows further.
Updated to Q1 2020
Beverage and industrial ethanol supply went from tight to short in Q1 as the coronavirus swept from Asia to Europe and sanitiser demand soared. By February normal arbitrage routes from Asia to Europe were mostly reversed.
When Europe sanitiser and cleaning product demand ballooned by late February-March, many producers were short and beverage-grade increasingly went into sanitiser production. Siphoning from fuel and technical grade markets became widespread with intra/extra EU exports increasingly curtailed.
Demand for industrial and beverage grade ethanol soared due to rocketing sanitiser, personal care and cleaning product demand in relation to the coronavirus. With supply falling short of demand for these end markets in some countries, demand in other markets was mixed as some industries began to lower output. Demand from the alcoholic drinks end market remained high, while that of circuit board cleaning, beverage production or alternative chemical production fell.
Brazilian ethanol supply has declined in Q1 with the end of the 2019-2020 harvest season for sugar cane. Domestic ethanol supply has been adequate to carry consumers until the start of the new harvest season in April. Exports of ethanol declined during Q1 because of closed arbitrage and dwindling volumes.
Demand for hydrous ethanol remained strong in Q1 because hydrous ethanol remained competitive over gasoline despite higher prices in January and February. 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%. The coronavirus has affected fuel consumption in Brazil at the end of Q1, with impact on both grades of ethanol.
Fuel ethanol production was largely steady as some fuel plants remained shut and demand was lower than expected. Some fuel producers were switching to industrial production as demand from that sector continues to increase as sanitizers are increasingly in demand.
Fuel ethanol demand sank to new lows in the first quarter as stay-at home orders were issued and most of the US remained off the roads, placing pressure on fuel ethanol demand. Many participants said that demand for fuel is almost non-existent.
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.