Price trend

According to the Commodity Market Analysis System of SunSirs, from September 23rd to 27th, the domestic ethyl alcohol price remained at 5,802 RMB/ton, a year-on-year decrease of 18.42%. The price of raw corn continued to decline, with a slight loosening in costs. As the National Day approaching, holders were actively shipping, but demand had not substantially improved, resulting in a clear situation of oversupply in the market. The domestic ethyl alcohol market continued to be weaker.

Analysis review

In terms of cost, the increase in corn production in the new season in the production area had led to a seasonal decline in corn. New grains were being launched one after another, but downstream demand was difficult to increase, leading to a strong bearish sentiment in the market and a synchronous decline in corn prices. The cost of ethyl alcohol lacked favorable support.

On the supply side, there were significant differences in the operating rates of production enterprises in different regions; Sichuan Hongzhan equipment was operating stably; Fukang only had four production lines, and the main large factories had low production capacity. There had been no significant changes to the equipment in other factories. The ethyl alcohol supply is expected to have  favorable factors for the market.

On the demand side, Baijiu consumption was supported averagely; Methyl ethyl ester maintained stable purchasing volume for anhydrous materials; It’s heard that the Jinmaoyuan plant of EA was planning to restart recently, and the operating rate had rebounded. Short term ethyl alcohol demand is expected to have favorable factors for the market.

Market outlook

Due to weak demand and subsequent decline in corn prices, ethyl alcohol analysts at SunSirs predict that the domestic ethyl alcohol market will remain weaker in the short term.

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