Narrow Fluctuations in the Ethanol Market in China in November

November 28 news

According to the commodity market analysis system, from November 1 to 28, the average price of Chinese ethanol producers narrowed down 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%.

As we enter November, China’s ethanol market continues its downward trend. The main influencing factors include: First, the regional price trend of corn—the raw material—where prices in major producing areas remain firm, providing some support to costs; second, earlier bulk grain purchases by leading manufacturers have resulted in most plants currently operating at full capacity, ensuring ample market supply; third, downstream chemical companies are mostly procuring according to demand and tend to seek lower-priced sources, leaving insufficient support from the demand side.

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

Supply side, the northeastern region of China stands out, with an overall operating rate as high as 92.43%, significantly higher than the national level. Specifically, major enterprises in Heilongjiang Province have been continuously operating at overcapacity, and other operational factories in the region are also basically 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, which has had a negative impact on the ethanol supply.

On the demand side, downstream ethyl acetate production has been affected as the Anhui Huayi and Guangxi Jinyuan plants have resumed operations, while the Jingmen Qianxin plant underwent a brief shutdown. Meanwhile, the Yankuang Lunan and Yueyang Changde plants experienced operational fluctuations. As the volume of capacity lost exceeded the volume restored, the ethyl acetate capacity utilization rate saw a slight decline. The demand for ethanol continues to be weighed down by bearish factors.

Market Forecast: With stable operating rates at enterprise facilities and limited demand, prices are expected to remain stable but tend toward the weaker side. Ethanol analysts anticipate that the ethanol market will likely consolidate in a weak range in the short term.