After the two festivals, China's ethanol prices have begun to weaken in the region. Henan is the first to launch a price reduction model. After arbitrage is opened, the purchase volume will increase and low-end prices will disappear. The continuous downward price in Henan will drive the market's bearish mentality, and prices in East China will follow Henan's trend. The large factory in Northeast China delivered goods in limited quantities, causing serious pressure on cars in front of the door, and prices maintained a stable trend. Fuel ethanol prices are also unable to escape the trend of price cuts. Demand has declined after the holiday. Some companies have a positive shipping mentality, and prices have dropped significantly; coal-based ethanol production has declined, and some inventories have been sold and are reluctant to sell at low prices. However, demand is poor and the market is bearish. Under the influence of negative mentality, the premium has decreased. Price situation in various regions as of press time: The price of premium corn in Henan was 6800 yuan/ton, down 200 yuan/ton before the handover; the general grade of cassava in East China and northern Jiangsu was 6950 yuan/ton, down 200 yuan/ton before the handover; The general grade of corn in Northeast Jilin was 6,700 - 6,750 yuan/ton, rising by 50 yuan/ton during the festival and then falling by 50 yuan/ton after the festival; The general grade of corn in Heilongjiang is 6,500 - 6,700 yuan/ton, and the low-end price before delivery is lowered by 50 yuan/ton.
Specifically, the negative impact on the cost side: With the concentration of corn in central and eastern China, prices began to fall, which affected the purchase volume in Northeast China. When a small amount of corn in Northeast China increased, prices began to fall. The supply of by-product ddgs has increased, the demand is limited, the market has a high bearish mentality, the price of corn has weakened, the price of parallel product soybean meal has weakened, and some companies have a positive shipping mentality, resulting in a significant weakening of ddgs prices and a reduction in subsidized ethanol production costs. In terms of dried cassava, Thailand sells cassava stocks in stock, and prices remain firm. The cost of delivery is high, and cassava ethanol companies are not willing to purchase. Supply side: Construction in Northeast China increased, the Shuntong plant in Inner Mongolia was started, the Hualiang plant in Dongfeng in Jilin was started, the Hongzhan Laha Phase II plant resumed production, and the Huanan plant was shut down. The impact on output was mostly concentrated on fuel; the construction of cassava ethanol in East China increased slightly, and mainstream factory equipment resumed normal production. During the two-festival period, company shipments were poor and inventories increased; During the two-festival period in Henan, inventories increased rapidly, reaching a high level. After returning from the holiday, the shipping mentality was positive. After continuous price cuts and cross-regional arbitrage was opened, inventories fell rapidly.
China's ethanol market is expected to stabilize in the short term. In terms of edible ethanol, large factories in Northeast China have limited shipments, and previous orders have not been completed. The company's inventory is not high and prices are stable. Henan currently has a return trip from Sichuan and centralized procurement of chemical quantities, which supports price stability. Chemical industry in East China has a procurement plan, and surrounding prices have increased, supporting the local price trend. In terms of fuel ethanol: Major factories in Northeast China operate orders and deliver goods. High and volatile crude oil prices are good for fuel ethanol shipments. There is a situation of downstream replenishment after the holiday. However, at present, from the market perspective, some companies have increased inventories and a positive shipping mentality. Demand in the later period will decline compared with last month, and the negative mentality will increase. There is a possibility of weak consolidation in the fuel ethanol market.
