Price Downtrend of Molasses-based Ethanol Still Continued

Price Downtrend of Molasses-based Ethanol Still Continued

Currently, most sugar mills in South China have started crushing. Although the molasses price does not fluctuate notably, the molasses supply will go up in the medium and long term. Especially in 2018, the demand for ethanol kept weak, and the profits at molasses-based ethanol distilleries were poor. Thus, most distilleries were cautious about restarting and maintained wait-and-see sentiment on the molasses price. SCI holds that the molasses price may fall back within narrow ranges, and some molasses-based ethanol distilleries will resume production in early January. Therefore, the molasses-based ethanol price is predicted to move down.      

In December, the supply of molasses-based ethanol hovered at a low level. However, the buyers were cautious and waited for the price decline of molasses-based ethanol, and the replenishment was on a need-to basis. The low-end prices of molasses-based ethanol dipped within narrow ranges for several times. In H2 December, most distilleries shut down the units and consumed the stocks. Distilleries showed great interest in sales, considering that most distilleries might restart for the future.

On the feedstock side, most sugar mills started crushing. However, distilleries showed little interest in the procurement of molasses, and some distilleries still had no restart plan. Thus, SCI predicts that the molasses price will fall back in tight ranges.

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