China Ethanol Market Consolidates with Weak Trend Amid Oversupply

The ethanol market has been experiencing a weak trend in China, with prices fluctuating due to oversupply. According to SunSirs' commodity market analysis system, the domestic price of ethanol fell to 5,521 RMB/ton by August 24th, marking a decline of 3.83% over the past three months and a year-on-year drop of 1.89%. This downturn is attributed to a temporary easing of supply-demand imbalance, which is expected to worsen in July due to higher capacity utilization.

The impact of cost factors on the ethanol market is mixed. Raw material corn prices are anticipated to rebound slightly, but corn-based ethanol producers continue to operate at a loss. Dried cassava prices remain stable, yet cassava-based ethanol production remains unprofitable. In South China, molasses-based ethanol prices are trending weak due to depleted inventories and shrinking producer margins.

Domestic ethanol supply has declined slightly, with weekly production standing at 187,100 tonnes, a decrease of 10,900 tonnes week-on-week. Imports remained unchanged at 1,000 tonnes, resulting in total supply of 187,200 tonnes, down 10,900 tonnes from the previous period.

On the demand side, overall demand saw a slight uptick, with total demand reaching 172,200 tonnes, an increase of 1,000 tonnes month-on-month. Domestic consumption stood at 172,000 tonnes (up 1,000 tonnes), while export volume remained flat at 200 tonnes.