The market has been down recently, and the price of edible ethanol has dropped to its lowest point in nearly two years (taking the Northeast region as an example). The continued decline in the market has made sporadic purchases under the influence of the mentality of downstream and traders who fear that they will continue to fall. As of press time, the price of ordinary ethanol in Heilongjiang is 5,700 - 5,900 yuan/ton, the price of ordinary ethanol in Jilin is 5,950 - 6,050 yuan/ton, the price of superior ethanol in Henan is 6200 yuan/ton, and the price of cassava ethanol in northern Jiangsu is 6400 yuan/ton. The price of fuel ethanol in Northeast China ranges from 6,200 to 6,300 yuan/ton.
Will the ethanol and fuel ethanol markets continue to decline in the short term? Let's take a look at the specific situation of the market with questions.
From a cost perspective: Although corn prices in Northeast China continue to weaken, companies consume most of the corn stocks purchased in the early stage. Although there is currently corn to supplement price reductions, the demand for by-product ddgs is weak and the supply is sufficient. Inventories have increased and prices have dropped to low levels. The company's production is basically at the cost line or has lost money. Support for continued weakness is limited. In terms of cassava ethanol in East China, the price of dried cassava in Thailand continues to weaken as the quantity increases and the price continues to weaken due to light purchasing in the Chinese market. The current price accounting is slightly profitable. However, if the ethanol market continues to weaken, the company's production will still be unprofitable or loss.
From a supply perspective: The Northeast corn ethanol factory maintains that the output of edible ethanol is greater than that of fuel ethanol (there has been no adjustment as of press time), while other small factories maintain normal production and all maintain orders and shipments. The inventory of the big factory is not high, which belongs to normal level. Corn ethanol production companies in Mengzhou, Henan Province maintain full production. However, in the short term, due to the impact of snowfall weather on delivery speed, the purchase of liquor has prevented the inventory from expanding the stock to reducing production. Currently, the price has dropped to a low level. Cross-regional arbitrage is opened, and the possibility of chemical demand procurement is not ruled out, and inventories are reduced. Judging from the experience of previous years, enterprises in Mengzhou have downtime during the Spring Festival. In the short term, cassava ethanol starts in East China basically remain low, and some companies in the ethanol market that continues to be depressed are waiting for the raw materials situation after the Spring Festival. Anhui Dachang has no plans to produce general-grade ethanol this year, and a small amount of inventory is consumed.
Demand side: Ethyl acetate that has been reduced or shut down has basically recovered this month. However, during the Spring Festival, except for some large factories that have no shutdown plans, other ethyl acetate factories have shutdown plans, and ethanol consumption has dropped. Liquor needs to be stocked just before the festival. Under the influence of the market's fear of falling, some purchases are cautious.
In terms of fuel ethanol: The main pre-holiday preparations have been basically completed, and orders from Northeast enterprises have been delivered. Downstream refineries have not experienced centralized stocking, and transaction prices have weakened recently, mainly due to the expiration of some contracts in the market or the dumping of goods by some companies. In the short term, refinery transaction prices may continue to weaken. Fermented fuel ethanol prices may remain firm in the short term due to support from orders.
