2020 Spring Festival China Ethanol Plants‘ Status
In 2019, the expansion of the ethanol industry gradually slowed down. Affected by environmental protection and safety supervision, the downstream demand for edible and industrial ethanol moved down significantly, and the enterprises faced huge inventory pressure. Additionally, the new entrants of the fuel ethanol industry trended up, while the industry policy changed a lot.
In January, the ethanol output in January is estimated to increase from that in 2019, and only Jilin Boda Biochemical may shut down their units. In Heilongjiang, all the units may operate normally during Spring Festival. In Inner Mongolia, the new units were put into operation in November, and the output trended up greatly. In Shanxi, the ethanol output will be unchanged from that in 2019. In Hebei, most units may operate normally during Spring Festival. In Shandong, Shandong Zhenlong Biochemical may shut down their units, Guanxian Xinrui Industrial shut down their units on January 24 and restarted the units on January 30. In Jiangsu, during Spring Festival, the operating rates may trend down significantly. In Henan, the operating rates will be higher than those in former years. In Anhui, Hubei, Guangxi and Yunnan, the ethanol output in January moved down from those in 2019. In Sichuan, most units will be shut down in Spring Festival.
After the Spring Festival, the resources in East China may be limited. There will be few feedstock cassava slices arrived at ports, and the supply will go up slowly. Moreover, the profits of cassava-based ethanol may be limited, and the demand may be at a low level. During the Spring Festival, the operating rates in East China will be not high. Therefore, SCI reckons that the cassava-based ethanol prices in east China will trend up. In Northeast China, most units will operate normally during the Spring Festival. In Heilongjiang, due to the limited storage capacity at some small plants, the participants may speed up sales. Supported by the corn-based ethanol prices at large plants, SCI reckons that the prices may no decline after the Spring Festival. In South China, the feedstock molasses prices were at a high level before the Spring Festival, and the production costs of molasses-based ethanol failed to decrease. Affected by the capital pressure, the prices of large orders are predicted to be flexible. In addition, the demand for molasses-based ethanol will be unchanged with low inventory pressure. During the Spring Festival, most units will be shut down for several days. SCI reckons that after the Spring Festival, the inventory will be at a low level, and the molasses-based ethanol prices will be largely stable.
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