Weak and Stagnant Ethanol Market Conditions in China

September 12th, news:

According to the commodity market analysis system, from September 5 to 12, the price of ethanol in China fell to 5,558 CNY per ton, with a decrease of 0.29% within the period, a month-on-month decrease of 1.71%, and a year-on-year decrease of 6.41%. The ethanol market in China has continued to be weak, with factory quotes falling, overall demand remaining low, and corporate inventories rising, leading to a continuous decline in the transaction price of ethanol.

Cost Perspective: From the cost side, circulation of old corn stocks remains low, while new harvest grain is gradually entering the market. Currently, sales regions are experiencing a transitional period with limited supply, leading to firm pricing. Meanwhile, prices in producing areas are slowly weakening. Additionally, ethanol production costs continue to weigh negatively on the market.

Supply side, Heilongjiang Hongzhan Laha has resumed production after a short stop, and Bayan is expected to resume production around the end of the month. Wanli's facility has resumed production, and Heilongjiang Shenglong has also resumed production this month. Jilin Fukang's third and fourth lines have resumed production. The Inner Mongolia Jietai Nuosu facility started regular production around August 25, and Shandong Qufeng's facility was ignited on August 29. Huaxing has returned to normal production after a short stop in the latter part of the month, and Mengzhou Houyuan is operating at around 70% capacity. Sichuan Hongzhan remains shut down this month. In East China, Huating in northern Jiangsu is maintaining 50% operation, and the Suchun facility has resumed production. The impact on ethanol supply is mixed.

On the demand side, the market is showing a divergent pattern: downstream chemical industries have recently experienced production cuts or delayed start-ups, while demand in the baijiu sector continues to grow moderately. Additionally, product transportation and shipment efficiency have been somewhat constrained due to logistics control measures implemented in certain regions. As a result, ethanol demand is being weighed down by these bearish factors.

Market Forecast: Ethanol production continues to increase, leading to an imbalance in supply and demand within the market, with supply exceeding demand. Demand from the downstream liquor and chemical sectors is improving, and consumer demand is expected to follow a positive trend. Ethanol analysts predict that the short-term ethanol market will continue to operate in a weak state.