SE Asia anhydrous ethanol tracks falls in US futures market

SINGAPORE (ICIS)–Fuel-grade anhydrous ethanol import prices in southeast Asia dropped to near-record lows in the week ended 22 November, tracking lower prices of ethanol futures in the US.

Spot prices were assessed at $465-469/cbm (cubic meters) CFR (cost & freight) SE (southeast) Asia, down by $7-8/cbm from the previous week, according to ICIS data.

The low end of the assessed price range reflects the lowest prices since ICIS began tracking the data in January 2011.

In the US, December-February ethanol futures traded on the Chicago Board of Trade (CBOT) settled at $1.39-1.41 per gallon on 22 November, down from $1.42-1.44 per gallon on 13 November.

Limited information about any confirmed deals by any buyers in the Philippines were available this week.

Some cargoes due to arrive in the Philippines in December had been transacted at around current price levels, market sources said.

Asian demand for fuel ethanol in coming months could increase although supply is largely expected to remain sufficient due to a strong crop season in the US.

But demand from the Philippines in the first quarter of 2018 could be slower as it is requiring users to use up more locally produced ethanol.

The country’s Department of Energy (DOE) set a higher total March-quarter 2018 allocation of 75,790 cubic metres (cbm) of locally-produced ethanol, up 7,040 cbm or 10.2%, from the allocation in the fourth quarter of 2017.

Ethanol shipments from the US were heard to be heading into China – the first time they have resumed since China raised import duties on US ethanol in January.

Some six-12 shipments or more of 20,000-40,000 tonnes are expected to be lifted from the US to China by year-end, traders said.

According to the US Renewable Fuels Association (RFA), US ethanol exports in September totaled 86.4m gallons, 16% lower than August. Canada was the top export destination for US ethanol, while India overtook Brazil as the second largest export market for US ethanol in September.

Picture: The Poet Biorefinery, an ethanol producer, and corn field, near Groton South Dakota, US.  (Source: Design Pics Inc/REX/Shutterstock)