Crushing Season Approach: Molasses Ethanol Prices to Face Downtrend

After holidays, the overall market supply was tight. The downstream white spirits and chemical industries replenished inventories intensively, resulting in the shortage of spot resources.

In East China, the cassava-based ethanol prices rose by RMB 250/mt, up 4.8% from last week. In Guangxi, the cassava-based Ethanol prices increased by RMB 150/mt or so. In the upcoming November, the sugarcane and fresh cassava will be gradually put into the market. In the meantime, the operating rates at distillers will increase greatly, and the Molasses-based ethanol prices will be likely to face downtrend.

In Yunnan, since April and May, most molasses-based ethanol distillers had ended the crushing, and they mainly sold the inventory products. Thus, the market resources were rare. It was heard that Yunnan Honghe Sugar Industrial planned to restart in late October, but the molasses volume was limited. The molasses-based ethanol prices inched up in Q3, 2017, up 6.4% from the same period last year. The mainstream dealing price was assessed at around RMB 5,350–5,400/mt tax included.

In Guangxi, the operating rates at the molasses-based ethanol distillers were not high, and the spot supply was tense. After holidays, the molasses-based ethanol market prices sharply increased. As the weather turned cool, the demand of the white spirits was getting warmer. In addition, under the pressure of the shortage of the feedstock and supply, the molasses-based ethanol prices rose by 11.22% from the same period last year. The mainstream dealing price was assessed at RMB 5,700–5,800/mt tax included.

By convention, in Yunnan, the crushing season will come in December, and all distillers will start up in January, 2018. In Guangxi, the crushing season will be scheduled to launch in late October, but it is likely to be delayed until November due to the sugarcane with low sugar content. “The annual demand was 100kt/a, but the ethanol supply volume was up to 200kt,” the relevant manager at Gengma Nanhua Huaqiao Sugar Industrial said.

Therefore, with the substantial increase of the molasses-based ethanol supply, the prices will be likely to drop in the mid-and-long term in Southwest and South China.