Ethanol Market Prices Remain Stable at High Levels in July

July 31 News

According to the commodity market analysis system, the Chinese ethanol market trended upwards in July. From July 1 to July 31, the average price of Chinese ethanol producers increased narrowly from 5655 CNY/ton to 5677 CNY/ton, with a price increase of 0.38% during the period, and a year-on-year price decrease of 5.58%.

At the beginning of the month, with high costs providing support, the cost pressure on ethanol further intensified, and short-term transactions within China were limited.

In the early part of the month, cost support weakened, with some production facilities about to resume operations. Downstream demand remained largely unchanged, and the ethanol market was digesting the price increase.

Mid-month, the price of raw material corn has slightly decreased, and cost support has weakened. Currently, the Chinese ethanol market is experiencing a situation of weak supply and demand, with the ethanol market mainly in a state of consolidation and observation.

In the late part of the month, ethanol market prices in China remained stable. Some factories raised their quoted prices, but there were no actual transactions. Downstream chemical industry rigid demand procurement led to a slight decline in transaction prices.

Cost Aspect: In the first half of the month, the center of gravity for corn prices continued to move upward. Currently, the national average weekly price of corn is 2437 CNY/ton, an increase of 15 CNY/ton. Ethanol production costs are influenced by relatively favorable factors. Overall, corn prices remain weak, market sentiment is subdued, and spot prices continue to decline. Ethanol production costs are influenced by relatively unfavorable factors.

Supply side, the production of edible ethanol has not fluctuated much. The Huanan facility in Heilongjiang is in operation, one line in Jixian is in production, and the Laha facility has resumed full production. The Bayan facility is expected to shut down on the 29th. Wanli Runda's edible and fuel ethanol production has already stopped, while Zhongke Green is in production, and Shenglong's facility is shut down. The impact on the ethanol supply side is mixed.

Demand side: From the demand perspective, downstream chemical industry prices have slightly decreased, and ethanol consumption has declined. In the short term, the demand side for ethanol is influenced by bearish factors.

Future Market Forecast: The supply side is mixed, with both increases and decreases, and the cost benefits have decreased. Ethanol analysts predict that in the short term, the ethanol market in China will mainly be in a wait-and-see and consolidation phase.