Ethanol Price in South China Almost Equaled That in East China

In East China, the offers at cassava-based ethanol distilleries inched down for several times this week following the low-priced ethanol resources from Northeast China. The mainstream dealing prices of cassava-based ethanol in East China were around RMB 5,200/mt (tax included). In South China, the molasses-based ethanol price fluctuated within narrow ranges, and the mainstream dealing prices were RMB 5,250-5,350/mt (tax included). According to SCI, the price in Northern Jiangsu is likely to dip, and the price decrease in South China may come after that.

Recently, the sales pace at cassava-based ethanol distilleries kept slow, and the mainstream negotiation dealing prices moved down for several times. However, price spread still existed between East China and Northeast China. On one hand, the operating rates at corn-based ethanol distilleries in East China remained high, and the supply was stable. Thus, market players held bearish sentiment. On the other hand, the demand from downstream chemical enterprises was on a need-to basis, and distilleries shared the same quality of ethanol in East China were faced with price competition. Therefore, the price was predicted to decline.       

In general, the overall domestic demand for ethanol remains average currently, and the supply exceeds the demand. According to sources, China’s economy may come under downturn pressure in 2019.