Ethanol - ETBE Report ( Week Report)
ETBE – T1 prices are steady-to-firm, at around US$507/cu m FOB Rdam (traded on Tuesday for April) while the T2 sector remains under pressure. T1 markets are firmer thanks to stronger ppt/April buying interest which has emerged in the past week, and supply is also not as long as some may have anticipated. Expectations that an excess of US material would hit the market in March haven’t materialised and there have been rumours of washouts and/or of US material being diverted to other more profitable locations e.g. Asia, possibly as industrial grade ethanol. Traders tend to suggest that this “diverted” volume is limited to just a few cargoes. There is still some interest in the US to EU arbitrage, due to the current firmer T1 outlook and recent fairly soft US domestic pricing. We expect that stricter sustainability requirements due in place in Europe in 2H10 may however dampen any EU buying interest and limit any arb even further.
