Ethanol Market Conditions Show Signs of Recovery

November 21st, according to news from China

According to the commodity market analysis system, from November 17 to 21, the price of ethanol in China adjusted to 5,289 CNY/ton, a decrease of 3.74% month-over-month and 4.18% year-over-year. The ethanol market in China showed some signs of recovery, with slight differences across regions. The price of corn, a raw material, increased, leading to higher cost support. In some areas, the supply decreased, with limited spot availability, causing factory quotations to rise. In some regions, the production of downstream products such as ethyl acetate increased, boosting the demand for ethanol, which is beneficial for the ethanol market.

Cost Perspective: From the cost side, corn prices have risen slightly, while ethanol plants maintain rigid demand for procurement. As a result, the positive factors supporting ethanol costs are weakening.

Supply side, the performance in the northeastern region is outstanding, with an overall operating rate as high as 92.43%, significantly higher than the national level. Specifically, major enterprises in Heilongjiang Province continue to operate at overcapacity, and other operational factories in the region are also maintaining full production, collectively driving up the overall operating load in the northeastern region. Several enterprises that were previously shut down have recently resumed production, leading to a negative impact on the ethanol supply.

On the demand side, downstream ethyl acetate producers—Anhui Huayi and Guangxi Jinyuan have restarted their facilities, while Jingmen Qianxin experienced a brief shutdown. Meanwhile, Yankuang Lunan and Yueyang Changde are facing operational fluctuations. As a result, the volume of capacity lost exceeds the amount being restored, leading to a slight drop in ethyl acetate’s capacity utilization rate. Additionally, negative factors weighing on ethanol demand are also at play.

Market Forecast: Overall, ethanol analysts expect the short-term ethanol market to remain largely in a consolidation phase.