Technical prediction of ethanol market: the downward trend is difficult to change
According to the Commodity Market Analysis System of Business Society, since February 18, 2024, the 7-day moving average has crossed the 30 day moving average and started a downward trend. Currently, both moving averages continue to decline in the same direction. On April 14, 2024, it was estimated that the probability of a change in operating trend (i.e. crossing the 7-day moving average above the 30 day moving average) occurring within the next 7 days is only 5.86%.
At present, ethanol prices continue to decline, reaching a historical low in nearly three years. The monitoring level is one year oversold, two years oversold, and three years oversold. According to the Commodity Analysis System of Business Society, the average price of ethanol in the past three years is 6878.45 yuan/kg, with a median value of 6772.92 yuan/kg, a minimum value of 5962.50 yuan/kg, and a maximum value of 7583.33 yuan/kg. The low price difference (compared to the lowest historical price difference in the past three years) is 0 yuan/kg, and the top price difference (compared to the highest historical price difference in the past three years) is -1620.83 yuan/kg.
According to the Commodity Market Analysis System of Business Society, from April 8th to 17th, the domestic ethanol price dropped from 6000 yuan/ton to 5962 yuan/ton, with a weekly price drop of 0.62%, a month on month decrease of 4.98%, and a year-on-year decrease of 15.02%. The domestic ethanol market continues to decline, with high inventory levels in large factories and strong shipping sentiment, resulting in continuously refreshing prices for terminal purchases.
On the cost side, as the temperature gradually rises, the difficulty of storing corn has increased. In addition, a large amount of imported corn has arrived at the port to supplement domestic market demand, and the intention of grain trading entities in production areas to liquidate their exports continues to increase. The overall supply of domestic corn market continues to be loose, while the breeding industry market remains at a low level. Deep processing enterprises have relatively sufficient corn inventory, and the pressure of strong supply and weak demand in the domestic corn market remains weak. The overall pressure on domestic corn market prices is weak. The cost side of ethanol is influenced by bearish factors.
On the supply side, there are significant differences in the operating rates of production enterprises in different regions; Less than 40% of construction in East China has started; About 80% of the construction in Northeast China has started; The operating rate in southern and southwestern regions is about 20%. Short term stable supply of corn ethanol, East China cassava ethanol, and coal based ethanol. The supply side of ethanol is affected by bearish factors.
On the demand side, there is no possibility of repair in downstream demand for edible alcohol, and the chemical terminal just needs to replenish it; The main business of fuel ethanol and local refining needs to replenish inventory as needed, and centralized stocking may occur before May Day. The short-term demand for ethanol is influenced by favorable factors.
Market forecast: By the end of April, the maintenance plans of each factory will be fulfilled, which will have a certain positive impact on the market; But on the demand side, downstream demand for food is not smooth, the purchasing atmosphere is flat, and large factory inventories are high. Ethanol analysts from Business Society predict that the short-term domestic ethanol market will be mainly weak.
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