According to the Commodity Market Analysis System of Shengyi Society, the domestic ethanol market experienced a gradual decline in September. From September 1st to 30th, the average price of domestic ethanol producers fell from 5970 yuan/ton to 5777 yuan/ton, with a price drop of 3.22% during the period and a year-on-year price drop of 18.77%.
In the first half of the month, downstream demand remained sluggish, with poor buying activity and light trading, resulting in a narrow decline in the focus of the domestic ethanol market. In mid month, the cost of edible ethanol in China was still in a loss making state, with downstream demand mainly for replenishment. The overall trading atmosphere was still acceptable, but the willingness to replenish was limited. At the end of the month, the price of raw corn continued to decline, with a slight loosening of costs. As the National Day approached, holders actively shipped goods, but demand did not show substantial improvement, resulting in a clear situation of oversupply in the market. The domestic ethanol market continued to be weak.
In terms of cost, the increase in corn production in the new season in the production area has led to a seasonal decline in corn. New grains are being launched one after another, but downstream demand is difficult to increase, leading to a strong bearish sentiment in the market and a synchronous decline in corn prices. The cost of ethanol lacks favorable support.
On the supply side, there are significant differences in the operating rates of production enterprises in different regions; The main large factories are not operating at a high rate. There have been no significant changes to the equipment in other factories. The ethanol supply is expected to be supported by favorable factors.
On the demand side, Baijiu consumption is generally supported; Methyl ethyl ester maintains stable purchasing volume for anhydrous materials; Ethyl acetate has heard that the Jinmao Source plant is planning to restart recently, and the operating rate has rebounded. Short term ethanol demand is expected to be supported by favorable factors.
In the future, with light demand and subsequent decline in corn prices, ethanol analysts from Shengyi Society predict that the domestic ethanol market will remain weak in the short term.
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