According to the Commodity Market Analysis System of the Business Society, the domestic ethanol market fluctuated at a low level in July. From July 1st to 27th, the average price of domestic ethanol producers increased from 6550 yuan/ton to 6650 yuan/ton, with a price increase of 1.53% during the cycle and a year-on-year decrease of 6.60%.

At the beginning of the month, production enterprises stopped production for maintenance ahead of schedule due to losses, resulting in a decrease in supply and a shortage of goods in the market, leading to an upward trend in the domestic ethanol market. In mid month, downstream inventory is mainly consumed, and price fluctuations are limited. In the latter half of the month, after the price boost, high-end transactions were limited, and demand remained stable in the short term. Cost support was weak, and the ethanol market returned to calm after rising.

In terms of cost, as we enter July, supported by the decreasing supply of high-quality surplus grain in the domestic corn market, grain storage trade is reluctant to sell and prices are high. Ports and downstream deep processing enterprises are raising prices to replenish inventory, driving the domestic corn market prices to continue to be strong. According to the Commodity Market Analysis System of Shangye Society, on July 27th, the benchmark price of Shangye Society corn was 2771.43 yuan/ton, an increase of 0.41% compared to the beginning of this month (2760.00 yuan/ton). The cost side of ethanol is a favorable factor.

On the supply side, in the early part of the month, domestic ethanol production enterprises gradually entered maintenance, supply decreased, and prices continued to rise. As of the end of July, there have been no significant fluctuations in the domestic ethanol supply side: Hongzhan Laha’s load has been boosted, Shenglong Parking, Jilin Fukang, and Tianyu have maintenance plans. The ethanol supply is mixed.

On the demand side, there will be a slight reduction in production in the chemical industry in the short term, but the demand loss is limited, and the short-term stable operation is the main demand. The demand for Baijiu is weak, and the short-term demand for ethanol is stable.

Future market forecast shows weakened cost and supply support, and stable demand operation. Ethanol analysts from Business Society predict that the short-term domestic ethanol market situation will be mainly on a wait-and-see basis.