Pressure on Korean B-grade ethanol prices remained to the downside on Wednesday as the market tries to make sense of mixed directional signals after China’s surprise interest rate cut on Tuesday. In the spot market, bids fell back to 470USD/m³, pulling offers down to 490USD/m³.
Brazil remains the main supplier of B-grade ethanol to the Asian market, with the weakening Real lending a bearish tone. The Real dropped once again to 0.2764 against the dollar yesterday, bringing weekly losses to 3%. With Brazilian exports expected to dwindle as the harvest finishes, traders are waiting to gauge Pakistan’s potential as a fourth quarter resupplier.
US fuel ethanol markets meanwhile were in more bullish mood in sympathy with rallying US stockmarkets on Tuesday. The US is the main supplier of fuel ethanol to the Philippines, and US exporters enjoy considerably lower freight rates than Brazil. But with the Brazilian currency continuing to weaken, suppliers have potential openings for Brazilian exports to capture market share.