June 12th, News
According to the commodity market analysis system, the price of ethanol in China has fallen to 5639 CNY/ton, with a decrease of 0.18% within the period, a decrease of 2.87% month-over-month, and an increase of 3.27% year-over-year. The maintenance season and the off-peak demand season are occurring simultaneously, and the supply and demand competition in the ethanol industry continues. Ethanol plants in some regions have entered the maintenance season, leading to a temporary decrease in supply, which helps to alleviate the current inventory pressure; however, at the same time, some downstream demand is also entering the off-peak season, with related facilities planning to shut down, especially as the demand for baijiu continues to weaken. In the short term, the ethanol market trends will vary slightly by region.
Cost Perspective: From the cost perspective, corn prices are under significant downward pressure. On the one hand, wheat has become the primary feed substitute due to its price advantage and nutritional benefits, while overstocked rice also offers a low-cost alternative. On the other hand, imported corn and barley, as supplementary feed sources, are jointly encroaching on corn’s feed-use market share. As a result, corn demand is unlikely to improve significantly in the short term, and the overall corn market performance is expected to remain weak. Ethanol production costs continue to exert downward pressure on the market.
Supply side, the overall situation of oversupply in the ethanol industry is unlikely to fundamentally improve in the short term. Due to factories entering the maintenance season and equipment being shut down one after another, the supply side has formed a favorable support, and it is expected that ethanol prices in the northeastern region of China will remain stable in the short term. The supply side is influenced by bearish factors.
Demand Side: On the downstream side, the ethyl acetate plant operated by Yankuang has failed to resume operations, and the Zhuhai Qianxin plant has been shut down. Meanwhile, other chemical plants are maintaining rigid demand procurement. Demand for baijiu has declined, and overall downstream demand remains subdued. The ethanol market is being weighed down by negative demand factors.
Market Forecast: The northeastern region has entered a maintenance period, and terminal demand continues to decline. Seasonal weak demand is persistently weighing on ethanol transaction prices. Ethanol analysts expect the ethanol market to continue trending downward.
