The Ulsan spot market remained quiet on Monday, as most barrels arriving into the port have been pre-sold, leaving little interest in trading in the spot market and seeing PRIMA’s Ulsan B-grade index sitting flat at 540USD/m3. Brazilian B-grade ethanol prices ended the week flat at 470USD/m3 last week.
Fresh UNICA data showed foreign sales of hydrous ethanol have climbed, now sitting at 57,189m3 for the first half of October, leaving total exports of hydrous ethanol so far this harvest season at 426,824m3, up 45% YoY. Domestic demand for hydrous ethanol for the first half of October was up 6% MoM, sitting at 836,833m3. With Brazilian hydrous ethanol production so far this year reaching 27,422,572m3, implied stock levels for this harvest season are currently sitting around 17,000,000m3.
US ethanol continued to climb higher, although prices are still sitting considerably lower than Brazil, leaving US ethanol as the cheapest barrel globally. Arbitrage opportunities for ethanol exports to China are beginning to slip away, as rumours continue to linger of subsidies being given to Chinese ethanol producers, and buyers’ interest becoming increasingly scarcer.
Chinese interest rates were cut for the sixth time in 12 months late last week, after reports showed that China is experiencing its slowest growth rate since 2009. This saw the US dollar soar to its highest level in three months on Friday.