Weak Consolidation in the Ethanol Market in China

August 22nd, according to news:

According to the commodity market analysis system, from August 15 to 22, the price of ethanol in China fell to 5,575 CNY/ton, with a price decrease of 1.33% during the period, a 2.41% decrease compared to the previous period, and a 6.62% decrease year-over-year. The market price of ethanol in China was weak, with factories lowering their quotations, limited new orders, and a proactive attitude towards shipping.

Cost Perspective: On the cost side, corn spot prices remain weak, and market demand shows no signs of improvement yet. Meanwhile, procurement activities by deep-processing plants in North China have also failed to show any significant recovery, providing limited support to the market. Meanwhile, market focus is gradually shifting toward the upcoming new-crop supply. Additionally, ethanol costs continue to be weighed down by bearish factors.

Supply side, the production of edible ethanol has not fluctuated much. Wanli Runda in Heilongjiang is operating normally, Hongzhan Bayan has started production, and Jixian has two production lines in operation. Other facilities are also operating normally, with factories showing a positive attitude towards shipping goods, and there are low prices in the market. The facility in Zhalantun, Inner Mongolia, has resumed operations. The impact on the supply of ethanol is mixed.

On the demand side, from the consumer end, liquor purchases have begun to pick up sporadically, while demand for certain chemical exports has shown signs of improvement. Meanwhile, consumption is expected to remain relatively stable in a narrow range. On the ethanol side, downside pressures continue to weigh on the market.

Market Forecast: With continued increases in supply and no significant improvement in demand, ethanol analysts predict that the short-term ethanol market in China will mainly show a weak trend.