Flu outbreak heightening demand for industrial ethanol - producer

14 February 2018 17:10 Source:ICIS News

SAN ANTONIO (ICIS)--A strong seasonal outbreak of the influenza virus across the US has spiked demand for industrial grades of ethanol, market sources said on Wednesday.

“We’ve had several liftings and higher-than-normal requests of spot volumes [for industrial grade ethanol],” a Midwest-based producer said on the sidelines of the National Ethanol Conference in San Antonio, Texas.

source: Godong \ UIG/REX/Shutterstock

According to officials from the US Center for Disease Control (CDC), influenza activity is on the rise overall and the country is on track to beat some recent records. The CDC reported 63 US children have died of the flu so far this season.

“Levels of influenza-like-illness across the country are now as high as we observed at the peak of the 2009 H1N1 pandemic,” the CDC said.

Antibacterial products like hand sanitizer and surface cleaners are produced using industrial-grade ethanol, and such products are in high demand by consumers to prevent the spread of bacteria and viruses.

Another ethanol producer commented that new customers are sending inquiries, creating a surge in demand for 190- and 200-proof industrial grade alcohol purchases on a spot basis.

The producer said that spot volumes are quoted at a premium to contract pricing.

“Spot prices are up, but that’s an unusual situation at moment,” the producer said.

Industrial ethanol contracts are assessed on a quarterly basis, and while this has driven demand, the recent outbreak is not likely to drive such contracts lower.

ICIS assessed Q1 200-proof industrial ethanol at $3.40-3.50/gal FOB (free on board) USG (USG), and 190-proof industrial ethanol at $3.30-3.40/gal FOB USG.

The conference continues through Wednesday.

Image above: Ethanol is used to make hand sanitisers like the one shown above. Source: Godong \ UIG/REX/Shutterstock

By Steven McGinn