Executive Summary: On the macro level, the recovery pace of domestic end-use manufacturing remains gradual, with downstream chemical industries primarily engaged in rigid-demand procurement. Regarding trade flows, imports rebounded to 4,000 tons in October, while exports reached 42,400 tons, making overseas orders a significant channel for diverting domestic supply. Considering multiple factors including supply, demand, costs, macroeconomic conditions, and import/export trends, the domestic ethanol market is expected to maintain a stable yet slightly weak trajectory in November. Price competition will intensify, with fermentation-based ethanol dominating market pricing power.
Monthly Ethanol Supply-Demand Balance Table (Unit: 10,000 tons, CNY/ton)
| Indicator | September | October | Change | % Change | Nov E | Est. % Change |
|---|---|---|---|---|---|---|
| Production | 78.74 | 82.28 | +3.54 | +4.50% | 84.00 | +2.09% |
| Imports | 0.02 | 0.40 | +0.38 | +1900.00% | 0.30 | -25.00% |
| Total Supply | 78.76 | 82.68 | +3.92 | +4.98% | 84.30 | +1.96% |
| Exports | 3.54 | 4.24 | +0.70 | +19.77% | 4.50 | +6.13% |
| Demand | 75.10 | 76.20 | +1.10 | +1.46% | 75.00 | -1.57% |
| Total Demand | 78.64 | 80.44 | +1.80 | +2.29% | 79.50 | -1.17% |
Ethanol production in November is projected at 840,000 tons, representing a month-on-month increase of 2.09%. Import volumes are expected to retreat to 3,000 tons, a month-on-month decrease of 25%, resulting in a total supply of 843,000 tons, a slight month-on-month growth of 1.96%.
Regarding bio-fermentation ethanol, following the large-scale market entry of new-season corn, ample raw material supply has driven sustained increases in operating loads. Most facilities in Northeast China are maintaining high load rates; units that underwent prior maintenance are gradually returning to operation, leading to increased outflow of goods. In East and Central China regions, scheduled maintenance has decreased, contributing to steady output improvements. However, intermittent short-term shutdowns persist in some areas, though their impact on national supply remains limited.
Operating rates for coal-to-ethanol plants are expected to remain generally stable. The Kaiyue unit continues to produce, while the Hengxin unit remains shut down, and other northwest coal-to-ethanol facilities are operating steadily. A potential variable lies in methanol prices. If methanol prices remain elevated, northwest coal chemical enterprises may shift production priorities, favoring methanol output over ethanol, thereby temporarily contracting coal-to-ethanol supply. Conversely, if methanol prices weaken, coal-to-ethanol supply will further expand. These two technological routes compete directly; once fermentation ethanol prices decline, its improved cost-effectiveness squeezes downstream orders for coal-based ethanol, amplifying shipment pressure for coal-based producers.
In terms of international trade, November imports are expected to dip slightly as overseas prices offer no clear advantage over domestic levels, limiting external supply supplementation. Export growth is anticipated to continue, with estimated volumes of 45,000 tons, a month-on-month rise of 6.13%. Amid geopolitical conflicts, higher overseas orders for certain chemicals have indirectly boosted ethanol exports, helping to absorb some domestic surplus. However, export volumes are insufficient to alter the fundamental oversupply situation in the domestic market.
Total demand in November is projected at 795,000 tons, a month-on-month decline of 1.17%. Under the current macro environment, overall improvements in downstream manufacturing remain limited. End-users are mostly maintaining rigid-demand restocking strategies with low willingness for large-scale inventory buildup, resulting in structural divergence in demand.
Positive Factors: Baijiu (Chinese liquor) has entered its traditional consumption peak season, with pre-holiday stockpiling providing some demand support. Driven by international geopolitical conflicts, certain downstream chemical products have seen export peaks. High operating rates for supporting units such as ethyl acetate have marginally improved industrial ethanol demand.
Negative Factors: Operating rates for dimethyl carbonate (DMC) and diethyl carbonate (DEC) remain low, with incremental demand from the new energy electrolyte sector falling short of expectations. There are no new policy stimuli for the fuel ethanol sector, keeping refinery procurement demand flat. The general chemical industry is constrained by the macro consumption environment, with downstream destocking cycles continuing and insufficient willingness for active capacity expansion. Overall, positive factors are only local and temporary, unable to drive a significant rebound in industry-wide demand.
The cost center for fermentation ethanol is moving downward alongside new-season corn prices. The concentrated market entry of new grain increases supply, putting pressure on corn deep-processing purchase prices and compressing the bottom line of fermentation ethanol production costs. However, farmers' reluctance to sell limits the depth of corn price declines, preventing unlimited cost reductions and providing weak support for ethanol prices. Most corn-based fermentation enterprises remain in profit inversion (loss-making) status. While factories have an incentive to hold prices due to losses, increased supply suppresses upward price movement.
Coal-to-ethanol costs are deeply linked to coal and methanol prices. If methanol prices remain high, the opportunity cost of coal-to-ethanol production rises. Once methanol prices fall, the cost advantage of coal-to-ethanol becomes apparent, further increasing market supply pressure. The differing cost logic between the two technological routes exacerbates internal price competition within the market.
With multiple factors intertwining, the ethanol market is expected to operate steadily but slightly weakly in November. On the supply side, rising operating rates for fermentation ethanol lead to continuous inventory accumulation. On the demand side, while the baijiu peak season provides support, overall chemical demand improvement is limited, with no obvious explosion points in end-user demand at the macro level; export increases only serve to mitigate pressures. On the cost side, declining fermentation raw material prices weaken bottom support, and uncertainty regarding production adjustments for coal-to-ethanol remains a variable. The industry's supply-demand mismatch persists, with bio-fermentation ethanol becoming the dominant force in market pricing.
Price Reference: Taking standard-grade corn-based ethanol in Heilongjiang, Northeast China, as an example, the projected trading range is 5,000–5,100 CNY/ton.
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