SunSirs: The Ethanol Market Was Weakly Consolidating

Price trends

According to the commodity market analysis system of SunSirs, the domestic price of ethanol has fallen to 5,598 RMB/ton. Over the past three months, the price has declined by 4.83%, with a month-on-month drop of 0.66% and a year-on-year decrease of 1.23%. The supply-demand imbalance in the ethanol market has eased temporarily; however, based on current maintenance schedules, capacity utilization is expected to rise further in July. Amidst an oversupply situation, ethanol market prices are undergoing fluctuating adjustments.

Market analysis

Regarding costs, the short-term outlook shows significant use of alternative grain sources and limited demand for corn; the market generally lacks upward momentum, maintaining a trend of stable yet weak pricing. Cost-side factors are exerting bearish pressure on ethanol.

On the supply side, the volume of bio-fermented ethanol has increased: Hongzhan Laha has resumed production and Henan Hanyong has returned to normal operations, while the Jilin Fukang facility has shut down. Currently, the ethanol industry's operating rate stands at 47.89%, with production at approximately 813,400 tonnes—an increase of 47,400 tonnes compared to the previous period. Supply-side factors are exerting downward pressure on the market.

On the demand side—specifically regarding downstream sectors—there is strong upward momentum in the ethyl acetate market; however, as prices have risen rapidly, downstream buyers are showing increasing resistance to purchasing. Demand for baijiu remains sluggish, as the market is in a traditional off-season with limited prospects for short-term recovery. Ethanol demand is facing bearish factors.

Market outlook

With maintenance periods in major production regions concluding and end-user demand improving—despite the fact that traditional demand remains in the off-season—the domestic ethanol market continues to face an oversupply situation. Analysts at SunSirs anticipate that the market will primarily undergo a period of consolidation.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.