New Policies Usher in a New Era for Anhydrous Ethanol

Recently, National Development and Reform Commission (NDRC) issued a document, which was designed to expand the production of the fuel ethanol and promote the use of ethanol gasoline by 2020. As upstream raw materials of the fuel ethanol, the anhydrous ethanol demand will surge in the future.

In August, most distillers launched routine maintenance due to the scorching temperature. Meanwhile, the operating rates at distillers were not high, influenced by the environmental protection inspection. Thus, the market supply for the anhydrous ethanol remained low, and prices continued to increase, hitting RMB 6,000/mt in local areas.

In northern Jiangsu, the anhydrous ethanol market prices fluctuated at highs in August. Affected by the environmental protection inspection, the anhydrous ethanol supply was insufficient. Besides, some fuel ethanol distillers replenished stocks continuously, and the demand was strong. Therefore, the anhydrous ethanol prices remained high. In September, with an increase of the spot supply, the price began to drop. Offers for the anhydrous ethanol were assessed at RMB 5,850–5,900/mt tax included, down 0.93% from last week.

In South China, the anhydrous ethanol prices continued to rise because of the shortage of spot resources. Influenced by the rainy day, the inventory level for the Thailand’s cassava slice was low, and no sufficient resources were replenished. Given that, traders pushed up the price, boosting the production cost at anhydrous ethanol distillers. Thus, it was a little hard for buyers to negotiate the anhydrous ethanol price, and the mainstream offer edged up. Offers for the anhydrous ethanol were RMB 5,900–6,050/mt, up 0.25% from last week.

In Northeast China, the anhydrous ethanol market prices maintained stability this week. Some major distillers will restart in the coming days, and players hold cautious attitude. Offers for the anhydrous ethanol were RMB 5,600–5,700/mt tax included, unchanged from last week.

In conclusion, the new policies spurred the further development of anhydrous ethanol industries. Players have an optimistic expectation for the future market.