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Energy Ethanol US

Softer global ethanol sentiment hits Ulsan values

Interest in the Ulsan market continued to focus on November arrival. Bids lingered at 440USD/m3, but offers fell slightly, leaving assessed value at 455USD/m3. Sentiment weakened in worldwide ethanol markets on Wednesday and Thursday.

In the US EIA reported a considerable build in stocks of 609,000bbl despite a drop in production, and the Brazilian Real continued to pull sugar based ethanol prices down further, trimming values by 5USD/m3 in both the Brazilian anhydrous and B-grade markets.

Changes to the Californian LCFS scheme which are scheduled for an approval vote at the end of this week could affect the economics of importing Brazilian sugar based ethanol into the US west coast meanwhile, with the potential to ripple knock on effects into the wider export markets. US corn ethanol is the most obvious beneficiary of the changes proposed to the scheme’s carbon accounting methodology, with the impact of changes to sugar ethanol methodologies so far less clear cut.

Brazilian ethanol is currently the most price competitive in the worldwide market, although space limitations in Brazilian ports is currently proving to be a handicap to trade.

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