October Ethanol Market Prices Show a Stepped Decline in China

October 31 News

According to the commodity market analysis system, from October 1st to 31st, the average price of Chinese ethanol producers narrowly decreased from 5,560 CNY/ton to 5,304 CNY/ton, with a price decrease of 4.61% during the period, and a year-on-year price decrease of 4.85%.

In the early part of the month, raw corn prices dropped significantly. After the holiday period, production facilities in some regions resumed operations at higher rates, prompting downstream buyers to replenish their essential inventories—leading to occasional deals at lower prices. As a result, China’s ethanol market prices experienced a noticeable decline.

By mid-month, the ethanol market continued to remain weak, while rising corn prices provided some cost support and improved market conditions. However, overall supply levels kept increasing, with downstream users primarily focusing on restocking their existing inventories rather than making new purchases.

In the latter half of the month, supply volumes expanded further as factories maintained normal operations. Meanwhile, demand from downstream sectors remained subdued, resulting in limited trading activity and pushing prices back down once again.

On the cost front, corn prices continued their steady-to-strong trend. Morning arrivals at deep-processing enterprises in Shandong remained low, as the earlier pressure from wet grain supplies has eased, allowing companies to adjust flexibly based on their individual circumstances. Prices in Henan also saw a slight increase. Meanwhile, deep-processing firms in Hebei slightly lowered their prices within a narrow range, while grassroots-level pricing stayed stable. Meanwhile, ethanol costs remain weighed down by bearish factors.

Supply side, Hongzhan's fourth plant is operating at full capacity, Wanli's facility is also running at full capacity, COFCO Zhaodong's fuel ethanol production has resumed, Jilin Fukang's third and fourth lines are in operation, and the facilities in Guido Jidong, Tieling, and Hailun are operating normally. As previously shut-down facilities gradually resume operations, the supply of ethanol is affected by bearish factors.

On the demand side, from the buyer's perspective, most traders are actively shipping goods, while downstream players remain cautious and adopt a wait-and-see approach, opting for small, on-demand restocking orders. Overall, market sentiment remains subdued. The ethanol demand side is weighed down by bearish factors.

Market Forecast: With stable operations at corporate facilities and limited demand, prices are expected to remain weak despite their current stability. Ethanol analysts predict that the ethanol market will likely consolidate at a weaker level in the near term.