July Ethanol Output Hit a Second Low in 2019

July Ethanol Output Hit a Second Low in 2019

In July, the output of China’s edible and industrial ethanol hit a second low in 2019, ranking behind that in February, on the ground that units took overhauls ahead of time. Due to the sluggish demand and meager profits, the output of ethanol would decrease to 6,000kt-6,100kt, down above 4% Y-O-Y.

In July, the output of edible and industrial ethanol was 430kt, down 86.5kt or 16.75%. The lowest output in the second half of past years usually occurs in August. Due to the sluggish demand and meager profits, units at ethanol distilleries took overhauls ahead of time.

In July, the output of ethanol declined greatly, on the ground that the output of corn-based ethanol was only 322.7kt, down 16.75% from last month. In Northeast China, more than half of units were turnaround or remained shut down. Moreover, in Henan and Hebei, the profits at corn-based ethanol were negative, dragging down producers’ enthusiasm for production. As for cassava-based ethanol, the output of cassava-based ethanol was 79kt, down 6.73% from last month. Given that the cassava slice prices remained at a high level, the profits at cassava-based distilleries suffered more losses, which dimmed the produces’ enthusiasm for production.

In 2019, China’s ethanol prices fluctuated within a narrow range, due to the weak demand and increasing production cost. The profits at cassava-based ethanol distilleries were negative for 16 months, and those at corn-based ethanol distilleries were less than RMB 200/mt. The production cost moved up, due to the feedstock prices. In 2019, corn’s supply and demand both declined, while, the cassava slice prices were at a high level. On the demand side, the demand for edible ethanol was affected by the integration of the downstream liquor industry and the changes in mass consumption habits, while the industrial sector is mainly constrained by terminal shrinkage.

.......
More detailed information, please click "Read more".