Product in Focus: Fuel Ethanol

This period, fuel ethanol plant prices in Northeast China remained stable, while delivered prices from major suppliers across regions saw an increase. Heilongjiang Hongzhan is operating at a low rate, while Heilongjiang Wanlirunda has increased its output. Plants such as SDIC Hailun, Jidong, and Tieling are operating normally for ethanol production. COFCO Zhaodong's plant is running normally, Jilin Fuel Ethanol's plant is in production, and COFCO Anhui is also producing. On-site supply experienced a slight increase, with major suppliers fulfilling previous orders. Some earlier low-price contracts have not been fully executed, with order fulfillment continuing. As of this report, the latest delivered price for fuel ethanol in Heilongjiang is 6,455 RMB/ton. In Liaoning, the delivered price is 6,588 RMB/ton, and in Jilin, it is 6,506 RMB/ton.

A reduction in coal-based ethanol supply has created room for an upward movement in bio-fermentation fuel ethanol transactions. Coal-based ethanol prices are stable with a slight downward bias. Shaanxi plant prices decreased; Anhui plant prices are stable; Henan plant prices are stable; Hunan plant offers are stable; Guangdong plant offers are stable; Xinjiang plant prices increased; Shandong plant prices are stable. Coal-based ethanol supply has declined. Shandong plants are operating stably; Shaanxi Yushen Nenghua is running at a low rate, Xinghua plant maintains a 50% operating rate, and Yulin Kaiyue is partially producing methyl acetate; In Anhui, some production has shifted to methyl acetate, leading to a slight decrease in ethanol output; Guangdong plants are operating normally, as is Yulin Kaiyue's plant; In Henan, Anyang is partially producing methyl acetate, resulting in a slight decrease in ethanol output, while Yongcheng is shut down; Jingmen Yuanhan's plant is shut down; Hunan plants are shut down; Xinjiang Tianye's plant is in production. As of this report, Shandong coal-based ethanol is at 6,400 RMB/ton, stable; Shaanxi offers are at 5,850 RMB/ton, down 70 RMB/ton; Anhui offers for the week are at 6,250 RMB/ton, stable; Ordinary anhydrous ethanol in Anyang, Henan is at 6,300 RMB/ton, stable. Plants in Hunan are shut down, with offers at 6,300 RMB/ton; plants in Hubei are shut down. In Guangdong, the price is 6,800 RMB/ton, stable. Prices in Xinjiang have increased. This week, as prices rose above the delivered price of bio-fermentation ethanol, overall chemical industry consumption declined. Individual transactions in Shaanxi were relatively large; transactions in Anhui were driven by rigid demand; consumption in Shandong was primarily from the chemical industry; chemical industry transactions in Henan were moderate. Overall, plant shipments were average. However, supported by previous contract orders, plants are reluctant to sell at low prices. Seeking development, some have begun selling methyl acetate, reducing ethanol output. Delivered prices in downstream Shandong and Henan regions have fallen, with sporadic chemical transaction prices.

China Fuel Ethanol Operating Rate Statistics

| Region | Current Period | Previous Period | Change |
| :------- | :------------- | :-------------- | :--------- |
| Northeast | 90.80% | 71.26% | +19.54% |
| North | 40.06% | 40.06% | 0.00% |
| East | 56.22% | 56.22% | 0.00% |
| South | 27.90% | 28.87% | -0.97% |
| Central | 37.69% | 33.03% | +4.66% |
| Northwest| 65.36% | 73.90% | -8.54% |
| Southwest| 44.20% | 55.98% | -11.79% |
| Total| 62.34% | 55.94% | +6.40% |

Comprehensive Supply-Side Analysis: During the period, coal-based ethanol supply decreased, while bio-fermentation ethanol supply increased, with supply primarily from major producers. Against the backdrop of strong demand across the industrial chain, this supports high fuel ethanol prices, with cost factors also providing some underlying support.