According to the monitoring of the business community, the ethanol market will fluctuate in a narrow range in 2022. In 2021, the price of ethanol will break through a five-year high. In 2022, with the normalization of demand, the ethanol market will also be relatively narrow, with no obvious fluctuations. The price dropped by 2.14% from 7000 yuan/ton at the beginning of the year to 6850 yuan/ton at the end of the year (as of December 15). The highest price in the year was 7566 yuan/ton in the middle and late May, and the lowest price was 6625 yuan/ton in the late August, with a maximum amplitude of 12.44%.
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Since the epidemic, ethanol, as a major disinfectant, has become a necessity in people’s daily life. The proportion of medical alcohol has increased a lot, becoming one of the main uses of ethanol. At present, the supply of medical alcohol is sufficient to meet the people’s living needs, and the price is rarely too high for a short time due to insufficient supply. The main factors affecting the ethanol market in 2022 are demand side and cost side. It can be seen from the price rise and fall chart of the ethanol industry chain of the business community that the annual drop of ethanol was 2.14%, ethanol raw materials: wheat rose 10.67%, corn rose 6.8%, and the cost side was positive, while the downstream product ethyl acetate fell significantly, with a decline of 22.58%. It can be seen that the rise of raw materials restrained the drop of ethanol, and downstream demand directly affected the trend of the ethanol market.
The ethanol market in the whole year can be roughly divided into three stages: the first stage is from the beginning of the year to the middle and late May, with upward shocks; The second stage is from the beginning of June to the end of August; The third stage is from the beginning of September to now, dominated by narrow fluctuations. Specifically:
From January to May 2022, the ethanol market fluctuated upward. Supply side: The large corn ethanol plants in the northeast of the main production area have reduced production and supply. The supply side is very good, and the supply of ethanol is short. Cost: The price of raw corn rose by 6.38%. Feed in spring and summer entered the traditional peak demand season, and the consumption of corn increased. The ethanol production enterprises faced the situation of high prices of raw materials with less shortage, and the cost was good. Demand side: downstream chemical products such as ethyl acetate just need to be purchased, and Baijiu has stable demand due to weather, which supports the price.
From June to August 2022, the ethanol market will decline unilaterally, and the price will drop significantly by 11.50%. The main factors are cost and demand. Cost: The price of raw corn is on the downward trend. Affected by more rainfall in the early stage, it was difficult to store corn, and the price fell continuously; After that, wheat gradually entered the stage of large-scale listing, forming a certain pressure on corn prices. On the demand side, in the high temperature period in summer, most downstream Baijiu enterprises, the main force of ethanol, have stopped production at high temperature. The profit of ethyl acetate is upside down and its other raw material, acetic acid, is also in a weak state. The cost support is insufficient, the price drops, the start of construction is weak, and some manufacturers have stopped for maintenance and reduced load, which has led to the reduction of ethanol demand. Domestic ethanol is already in a state of overcapacity, and it is easier to accumulate inventory after the downstream demand decreases. The inventory pressure makes ethanol enterprises more bearish, and the price reduction is used to stimulate shipment. The ethanol market has been declining.
From September 2022 to now, the ethanol market fluctuated and rose in September. Affected by the pre holiday stock, the downstream purchasing atmosphere showed signs of warming. Since entering the traditional peak season of “Yinshi”, the demand for chemical end ethyl acetate has been sluggish recently, and the price has dropped continuously, which has caused the decrease of ethanol demand. Domestic ethanol is already in a state of overcapacity, and it is easier to accumulate inventory after the downstream demand decreases. The inventory pressure makes ethanol enterprises more bearish, and the price reduction is used to stimulate shipment. The downstream Baijiu enterprises, which are the main force of ethanol, have entered the start-up state in succession. However, the plant start-up rate is not high. Before the temperature turns cold, the sales of Baijiu is general, which cannot support the ethanol market in October. Since November, the amount of repeated disinfection of the epidemic has increased, and chemical enterprises just need to purchase. The continuous rise has also stimulated the downstream to take goods. At the same time, the weather is getting colder, the demand for Baijiu is increasing, and the price of corn, the raw material, remains high. The negative factors that dominate the ethanol market are in the supply side, with overcapacity and sufficient supply, and the ethanol price is difficult to recover.
According to incomplete statistics, the new coal production capacity in China will reach 3.5 million tons in the future, which is mainly due to the continuous high trend of China’s corn price, the high production cost of corn fermentation method, and the comparative advantage of coal to ethanol production cost, which will have a certain share in the market. However, the overall ethanol market supply is large, and the downstream increment is limited, so the new production increase may not be able to be implemented.
It is predicted in the future that after the centralized release of new capacity in 2022, the ethanol industry has turned into a state of oversupply, and corporate profits have shrunk significantly, which may affect the release progress of some new capacity in the later period. At present, domestic production enterprises plan to withdraw a total of 3.47 million tons of production capacity, mainly in Jilin, Heilongjiang, Henan and other regions. The main reason for the withdrawal of production capacity is that enterprises do not have industrial competitiveness and the market will eliminate itself. At present, the price of raw corn is high, the pressure on production cost is great, and the profit of ethanol production enterprises is insufficient. However, the sluggish demand is still the main factor restricting the price of ethanol. The ethanol analysts of the business community predict that the domestic ethanol market will be dominated by the downturn in the short term. In the medium and long term, the increase of corn free ethanol production capacity and high-quality coal based ethanol production capacity may lead to a wave of growth in the ethanol industry by optimizing resource allocation.
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