Ethanol Market Fluctuates as China Confronts Oversupply
China's ethanol market has seen fluctuations and consolidation in recent months, according to SunSirs. The domestic price of ethanol has dropped by 2.36% over the past three months, reaching 5,516 RMB/ton. This year-on-year drop stands at 0.86%. The oversupply in the market remains a concern due to increased production after maintenance shutdowns at facilities.
Supply-side factors show mixed results: while ethanol output in August rose by 28,700 tonnes (3.56% month-over-month) to 835,000 tonnes, cumulative production for the first eight months of the year stands at 7.0051 million tonnes. On the other hand, national average corn prices have risen slightly, but regional trends vary: Northeastern regions remain stable, while Henan has seen a decline in prices.
Despite an oversupply, demand-side factors are generally positive. Total demand reached 172,200 tonnes in August, with a slight uptick from the previous month. Domestic consumption and exports remained relatively flat at 172,000 tonnes and 200 tonnes, respectively. The chemical downstream sector has seen improvement, particularly with Yankuang's ethyl acetate unit resuming production.
Analysts at SunSirs anticipate an upward trend in the ethanol market due to increasing demand ahead of holidays and rising freight costs. Delivered prices have increased as a result.