Q1-Q3 Edible & Industrial Ethanol Output Increased Y-O-Y
According to SCI, from Q1 to Q3, China’s output of edible and industrial ethanol reached 4,821.1kt, up 437.9kt or 9.99% Y-O-Y. The increment was mainly from the grain-based ethanol. It’s estimated that ethanol producers will maintain high production enthusiasm in Q4, and the total output in 2023 may exceed 6,300kt.
In the first three quarters of 2022, China’s edible and industrial ethanol output reached 4,821.1kt, hitting a record high from 2018. The increment was mainly from the output of grain-based ethanol, while that of cassava-based, molasses-based and synthetic ethanol declined Y-O-Y.
Grain-based ethanol: Producers maintained production enthusiasm on positive profits.
Although the gross profit declined Y-O-Y, it remained positive, leading to high production enthusiasm. According to SCI, the output of grain-based ethanol was 3,217.7kt in the first quarters of 2022, up 18.78% Y-O-Y. Taking the corn-based ethanol as an example, its average gross profit was RMB 54.68/mt, down 137.61% Y-O-Y. The output mainly increased in Q2 and Q3.
Cassava-based ethanol: Output inched down and profit declined Y-O-Y.
The output of cassava-based ethanol declined slightly Y-O-Y in the first three quarters of 2022. According to SCI, the output was 1,487.3kt, down 1.88% Y-O-Y. The output mainly declined in Q2 and Q3 due to the feedstock shipping and transportation in Q2 as well as profit losses and increasing unit maintenance in Q3. The average gross profit was RMB 163.15/mt in the first three quarters, down 56.67% Y-O-Y.
Others: Output declined notably and the production positivity underperformed.
The production of molasses-based ethanol suffered profit losses the whole year, and the effective capacity of synthetic ethanol declined, so the overall output declined notably in the first three quarters of 2022. According to SCI, the output of molasses-based ethanol and synthetic ethanol was 82.2kt and 33.9kt respectively, down 32.62% and 8.13% Y-O-Y. The profit of molasses-based ethanol average RMB -1,145/mt. Although the production of synthetic ethanol saw positive profits, some units remained in shutdown for a long time, leading to the low output.
Q4 forecast: Output will inch up in Q4 and the total output in 2022 will increase Y-O-Y.
In Q4, the supply of feedstock corn and cassava will increase, and the operating rate will improve in Northeast China during the winter. Considering the newly added capacity, it’s estimated that the output of edible and industrial ethanol may exceed 1,500kt in Q4, and the total output in 2022 will likely increase Y-O-Y.
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