Ethanol Output Hit a 16-Month High in May
According to SCI, China’s edible and industrial ethanol output was 607.2kt in May, up 17.30% M-O-M and 29.44% Y-O-Y. The arrivals of cassava at ports accelerated, and the production in Northeast China resumed, pushing up the output to a 16-month high. The production of fuel ethanol still faced profit losses, while producers maintained positivity of edible and industrial ethanol production. Therefore, it’s estimated that the output will likely increase in June.
The output increment was mainly contributed by that of grain-based ethanol and cassava-based one, while the output of molasses-based ethanol and synthetic ethanol declined M-O-M. The improved transportation in Northeast China affected the output of grain-based ethanol greatly. According to SCI, the output of corn-based ethanol reached 407.4kt in May, up 17.93% M-O-M.
In addition, although the profit from producing corn-based ethanol declined month by month, it remained positive. Therefore, the production enthusiasm was still seen. However, with the weather getting hotter, the major corn-based ethanol producers in Jilin and Heilongjiang will start maintenance in July and August.
With the transportation of feedstock accelerated, China’s cassava-based ethanol output increased in May. According to SCI, the output reached 187.7kt, up 24.14% M-O-M. Therein, the output increased the most in East China. Although the production of cassava-based ethanol suffered profit losses in May, most producers will maintain their production with intensive arrivals of feedstock at ports instead of shutting their units down immediately due to the profit losses. Currently, the feedstock is ample at most producers, so no intensive shutdowns will be seen in June.
Despite the cost pressure, no long-term shutdowns will be seen in June. In addition, due to the profit losses of the fuel ethanol production, some producers have lowered their output of fuel ethanol in June and raised that of edible ethanol, which will likely lead to a M-O-M increment in the output. From July to August, large-scaled grain-based ethanol producers will take annual maintenance, and cassava-based ethanol producers will likely suspend production for a short time in August affected by the feedstock and weather. Therefore, the lowest output in 2022 will likely seen in July or August.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
