Edible & Industrial Ethanol Output to Rise in Q2
In Q1, 2022, the output of edible and industrial ethanol was estimated at 1,615.4kt, down 1.66% from Q1, 2021 and 0.36% from Q4, 2021. It’s estimated that the output in Q2, 2022 will increased from Q1.
The output of edible and industrial ethanol is estimated to decline in Q1. The output of cassava-based ethanol and synthetic ethanol showed an uptrend both year-on-year and from last quarter. The grain-based ethanol output showed a downtrend. The molasses-based ethanol output increased from last quarter while declined Y-O-Y.
The output of cassava-based ethanol is estimated at 490.2kt in Q1, up 2.15% from last quarter and 9.29% Y-O-Y. The changes in the gross profit affected the output of cassava-based ethanol. Although the gross profit of cassava-based ethanol declined by almost 50% Y-O-Y, it remained at a high level of RMB 534/mt so far in 2022, which was much higher than those from other production technologies. For the cassava-based ethanol producers, the demurrage days of their feedstock were 15-40 days, showing no improvements from last quarter.
The grain-based ethanol output in Q1, 2022 is estimated at 1,057kt, down 6.69% from last quarter and 2.15% Y-O-Y. In January 2022, the average price of corn-based ethanol in Jilin was RMB 6,640/mt, up 2.95% from last quarter. However, the profit declined by 21% from last quarter, impacting the production enthusiasm of corn-based ethanol producers. In addition, affected by the transportation and arrivals of goods at ports, the corn-based ethanol output declined notably in March. Taking Northeast China as an example, the output was merely 161.8kt in Q1, 2022, which was the lowest since last September.
The molasses-based ethanol output was 56.7kt in Q1, 2022, while it was less than 5kt in Q4, 2021. The output in Q1, 2021 was 83.9kt. The delivered price of feedstock molasses was high, which impacted the production enthusiasm of molasses-based ethanol producers. In addition, affected by the weather and logistics, the production of molasses-based ethanol was unstable, and the output was 124.4kt I January, which was the lowest from 2014. Considering the situation of Q1, it’s estimated that the molasses-based ethanol output in 2022 will decline slightly from 2021.
In Q2, it’s estimated that the output of edible and industrial ethanol will increase from Q1. The output decline in Q1 was mainly affected by the Spring Festival and logistics, the impacts of which will weaken in Q2. In addition, with the ethanol price hitting record highs in Q1, the profits from producing corn-based ethanol and cassava-based ethanol improved significantly in March. Therefore, it’s estimated that large-scale producers will raise their operating rates in Q2.
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