July 10th News
According to the commodity market analysis system, the price of ethanol in China has fallen to 5619 CNY/ton, with a decrease of 4.84% over the past three months, a month-on-month decrease of 0.34%, and a year-on-year decrease of 0.81%. Costs have stabilized, and there is limited fluctuation in supply and demand, with the ethanol transaction market operating steadily. There are fluctuations in the production facilities in the main producing areas, but the loss of production capacity is limited. On the demand side, the end consumer market continues to face pressure and shows weak recovery, and downstream purchasing entities are adopting a wait-and-see attitude.
Cost Perspective: From the cost standpoint, corn prices in Northeast China remain stable with a slight downward bias, and trading conditions show no signs of improvement yet. In the North China region, corn prices are experiencing narrow fluctuations within a range, with localized divergences. Traders generally hold relatively high inventory levels. Recently, some regions have been affected by rainy and overcast weather, leading to weaker corn buying and selling activities and uneven distribution of grain supplies. In sales areas, the price center of gravity for corn markets has slightly weakened. Ethanol production costs continue to exert downward pressure on the market.
Supply side, from the supply perspective, the overall situation of oversupply in the ethanol industry is unlikely to fundamentally improve in the short term. The capacity utilization rate of ethanol remains at 46.43%, with a decrease in supply. The supply of bio-fermentation ethanol has decreased, with Shenglong in Heilongjiang and Hanyong in Henan shutting down their facilities. Fukan in Jilin is operating on lines three and four, while line two is shut down; Xintianlong in Jilin is in production, but the Dongfeng Hualiang facility is shut down. There are some positive factors affecting the ethanol supply.
On the demand side: From the perspective of demand rhythm, this year’s Mid-Autumn Festival and National Day holidays overlap, and the pre-holiday stocking period is expected to begin in early September. At that time, downstream sectors such as baijiu, chemical products, and gasoline blending will enter a phase of concentrated restocking, which could provide a short-term boost to the ethanol market. The demand side for ethanol is thus benefiting from favorable factors.
Market Outlook: With the maintenance period in major production regions coming to an end and terminal demand improving, the traditional demand sector remains in the off-season. Currently, China’s ethanol market continues to be characterized by a supply-demand imbalance, with supply exceeding demand. Ethanol analysts anticipate that the ethanol market is likely to enter a consolidation phase.
