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 2020
The crucial annual sugar beet harvest wrapped up by the start of Q4, with year-on-year yields down by at least approximately 10%. Existing industrial 99% stocks proved to be sufficient to handle the rising disinfectant demand brought on the resurgence of the virus. Crisis distillation of unsold wine stocks continued to provide materials for the beverage 96% market ahead of peak winter holidays demand. Crumbling gasoline demand also eased bioethanol availability concerns in Q4.
A rapid spread of the second wave of the coronavirus resulted in buying interest from the disinfectants sector for industrial 99% ethanol to firm steadily through Q4. Bioethanol fuel consumption tumbled along with gasoline usage as movement restrictions limited driving activities across Europe. Beverage 96% saw robust demand as well ahead of the peak winter holidays as supermarket sales continued to offset the demand loss from hospitality.
Latin America ethanol supply peaked in Q4 as sugarcane processing ended due to seasonality of feedstock availability. Corn-based ethanol plants will continue production until the next sugarcane harvest starting March/April 2021. Inventory levels remain higher than historically amid reduced fuel consumption and despite an increased portion of sugarcane feedstock used for sugar production over ethanol.
Domestic ethanol demand in Q4 remained lower than prior years due to pandemic led fuel demand erosion but is increasing 5-10% monthly. Export purchase demand was robust in the last quarter of 2020 as traded volumes increased year on year by 79% in October and 74% in November. Hydrous ethanol used in flexible-fuel vehicles (FFVs) competes directly with gasoline. Anhydrous ethanol is blended in gasoline at a mandated 27%.
Supply of fuel ethanol rose in Q4 as demand remained weak and plants restarted after being idled. Inventories of fuel ethanol continued to rise through the quarter and now outweigh demand. Fuel producers are exiting the industrial market and are returning to fuel production.
Demand for fuel ethanol rose slightly on holiday travel but remained weak. While the holiday season boosted demand, it remained 25-50% below normal depending on the region. Demand for industrial ethanol remained high due to demand for sanitizers, although this did little to offset the impact from weak fuel demand.
Updated to Q3 2020
Supply in the Asia market decreased. Some producers switched to produce sugar, which was more profitable, rather than hydrous b grade ethanol. In addition, more than half of harvest season has passed and the limited availability of feedstock further reduced the supply on the sellers’ side.
There was a significant decrease from the demand side since July, especially when compared with Q2, as most downstream users have secured enough cargoes to last until the end of the year. Demand from hand sanitizer producers also decreased along with the easing of the coronavirus pandemic, and with the disinfectants sector saturated in the main import countries such as South Korea and Japan.
Updated to Q4 2020
There was no significant change from supply side; most producers kept their operating rates at a relatively low level to avoid inventory pressure. Most adopted a cautious attitude due to the ongoing coronavirus pandemic.
Demand remained lacklustre in the beginning of Q4, but saw some improvement owing to decreasing domestic availability in some regions due to plant issues. However, as the plants gradually resumed operations, import demand turned muted again.
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.
Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.
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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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