Under high cost pressure, ethanol profits continue to hold in a sustained loss-making consolidation.

I. Costs Consolidate at High Levels; Ethanol Industry Chain Prices Drift Lower in Consolidation

The ethanol industry chain shows a pattern of weak cost pass-through, with most products holding steady. Corn prices in Heilongjiang edged down, directly pulling down the price center of locally produced corn-based ethanol, reflecting cost pass-through from the feedstock end to fermented ethanol. Ethyl acetate in East China was slightly lowered, mainly due to feedstock-side pressures and lackluster just-in-time demand from downstream coatings and ink sectors. The FOB quotes for dried cassava in East China and spot prices of ethyl methyl carbonate remained unchanged, with supply and demand reaching a short-term balance. Overall, price changes across all products were below 1%, within a narrow fluctuation range. The market lacks momentum for sustained rallies or deep declines, and is likely to maintain a weakly consolidating trend in the short term, with just-in-time demand-led follow-through.

Domestic Ethanol Cost Table (Unit: RMB/ton)

Data source: Chempricehub

Northeast corn and by-products analysis: Corn prices continued their weak run this week. As of August 13, the national weekly average corn price stood at 2,303 RMB/ton, down 13 RMB/ton from last week, a decline of 0.56%. By region, Northeast corn remained weak this week. Although a slightly firmer futures market lent some support to sentiment, downstream offtake capacity was limited, keeping market trading sluggish. In North China, corn stabilized and rebounded this week. Following the sustained price declines earlier, traders became increasingly reluctant to sell, and combined with the impact of rainfall, arrivals at deep-processing plants remained low, prompting quotes to turn from declines to gains. In the sales regions, the corn market stabilized this week. Buoyed by the futures market, some quotes edged up, but transactions continued to center on just-in-time demand. Terminal livestock profitability remains poor, and feed enterprises have not engaged in concentrated stockpiling.

Dried cassava analysis: Thailand dried cassava prices held steady this week. Current market quotes for Thailand dried cassava stand at USD 245/ton FOB, with the RMB exchange rate fluctuating at 6.746.

Molasses analysis: This week, Guangxi molasses is selling from inventory, with ex-plant prices at 830–850 RMB/ton and truck freight to factories around 50 RMB/ton. At present, only the Haiying plant is running molasses ethanol production; all other plants are shut down.

II. Ethanol Prices Drift Lower on Supply-Demand Fluctuations; Ethanol Profits Continue to Narrow

The national average corn price declined slightly over the period; corn prices in Northeast China fell, Northeast ethanol transaction prices weakened, and by-product DDGS prices dropped, widening production losses. Thailand dried cassava quotes were stable, the RMB exchange rate fluctuated slightly, and ethanol prices were steady, leaving plant production losses unchanged. Molasses prices were stable while molasses ethanol prices fell, resulting in declining molasses ethanol profits.

Outlook: Feedstock corn prices are expected to remain weak, keeping corn-based ethanol prices soft and extending losses for corn ethanol plants. Dried cassava prices are stable and cassava-based ethanol prices are steady, so plant production losses are set to persist. In South China, molasses ethanol prices are likely to remain weak, molasses inventories are being drawn down, and molasses ethanol profitability is expected to decline.