Price trend

According to the Commodity Market Analysis System of SunSirs, the domestic ethyl alcohol market experienced a gradual decline in September. From September 1st to 30th, the average price of domestic ethyl alcohol producers fell from 5,970 RMB/ton to 5,777 RMB/ton, with a price drop of 3.22% during the period and a year-on-year price drop of 18.77%.

Analysis review

In early September, downstream demand remained sluggish, with poor buying activity and light trading, resulting in a narrow decline in the focus of the domestic ethyl alcohol market. In mid September, the cost of edible ethyl alcohol 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. In late September, 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 ethyl alcohol market continued to be weaker.

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 have low production capacity. There have been no significant changes to the equipment in other factories. The ethyl alcohol supply is expected to be supported by favorable factors.

On the demand side, Baijiu consumption was generally supported; Methyl ethyl ester maintained stable purchasing volume for anhydrous materials; Ethyl acetate has heard that the Jinmao Source plant was planning to restart recently, and the operating rate has rebounded. Short term ethyl alcohol demand is expected to be supported by favorable factors.

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 be weaker in the short term.

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