Ethanol prices worldwide have continued climbing, keeping offers into the B-grade CFR Ulsan market well supported at 530USD/m3, although bids continued to sit much lower on Thursday at 465USD/m3, pushing the PRIMA B-grade Ulsan ethanol physical index up 10USD/m3 to 490USD/m3. Brazilian markets have continued to climb on the back of recent refinery gasoline price hikes and increased uncertainty over future gasoline taxes.
The US government yesterday agreed the terms of the Trans Pacific Partnership (TPP), which is now awaiting approval from congress. This agreement would open up free trade agreements between the US and 11 other Pacific fronting countries; Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
This could theoretically open up Vietnam as an ethanol importer as the country pursues an E5 rollout by the end of this year. Vietnamese fuel distributors have been meeting mandated demand through domestic production until now, with traders also questioning the country’s ability to accommodate imports given antiquated logistical infrastructure. Other Asian end-users have seen domestic producers struggle to compete on price against cheaper imports from the US and Brazil.