Price Trend

In June 2019, the price of ethanol was 5 280 yuan/ton at the beginning of the month and 5 364 yuan/ton at the end of the month. The price of ethanol fell by 1.59% in the month. Prices fell by 0.61% over the same period last year.

II. Analysis of Influencing Factors

Products: In June, the ethanol market rose and fell unevenly. In the early period, the enterprises in Northeast China experienced a long-term low price, and their willingness to pull up was obvious. Under the absence of obvious favorable market support, large factories raised their offer sharply. During the period of price increase, large factories executed more contract orders, and the new price was not closed. The contract orders were executed later this month, and the stock of large factories was not high in the short term, but the market was not. There are few enterprises with positive shipment mentality, and prices have declined. At the end of this month, small factories have been driving, and market transaction prices have weakened slightly.

Industry chain: In terms of raw materials, corn: This month, the price of corn rose first and then fell. After six launches, the market supply exceeded the demand. Feed market downstream was weak and prices weakened. According to the profitability of corn alcohol in Heilongjiang, the current purchase price of corn is around 1600-1770 yuan/ton, and the current price of DDGS is between 1950-2050 yuan/ton. Downstream, ethyl acetate: This month, the domestic ethyl acetate Market rose and fell after the shock to restore the position at the beginning of the month. At the beginning of the month, following the delivery of export orders at the end of last month, domestic ethyl acetate stock export supply alleviated the situation of oversupply in the domestic market. At that time, the overall start-up of domestic ethyl acetate plant was low, and the market supply side was well supported.

Industry: According to the price monitoring of business associations, in June 2019, there were 34 commodities rising annually in the chemical sector, of which 11 commodities increased by more than 5%, accounting for 13.1% of the monitored commodities in the sector; the top three commodities were epichlorohydrin (20.33%), hydrochloric acid (20.00%) and calcium carbide (11.04%). There are 43 kinds of commodities with a decline of more than 5%, accounting for 19% of the monitored commodities in this sector. The products with the first three declines are hydrogen peroxide (-21.81%), silicone DMC (-17.38%) and butanone (-13.71%). This month’s average rise and fall was -0.38%.

3. Future Market Forecast

Later market point of view, July is coming, Northeast big factories will start alternate maintenance. According to the maintenance situation in 2019, large factories will basically be overhauled, which will directly lead to the reduction of market supply, but at the same time, considering that inventory will be made ahead of time before shutdown. Moreover, this year, Northeast small factories will be overhauled ahead of schedule. From the end of January to the beginning of July, three small factories have restart plans, and they themselves will be restarted from July to August. It is the off-season of alcohol demand, so downstream purchasing volume only maintains just demand, so although the supply of large factories will be tightened in turn, it is unlikely to soar on the basis of supply and demand side considerations. In the East China market, due to the high price of cassava dried at the end of this month, factories will shut down to avoid losses, and in the later period, most of them will watch the Northeast side operation; Henan’s current price advantage is still high. However, at present, the price reduction in Northeast China or the pressure on the shipment of Henan market, and the intentions to fall in the later period are relatively strong; the improvement of southern China in the later period is limited, and the recent market orders are lower than the mainstream price, so there will be price reduction adjustment, but considering the profit level, the range is limited. Ethanol analysts at business associations predict that the domestic ethanol market will continue to rise and fall in the short term due to large regional differences.