ETHANOL - ETBE (Week Report)
ETHANOL – The European spot markets have had a strong start to the year, with firmer prices in both the T1 and T2 sectors. T2 for prompt delivery was booked at €558/cu m FOB Rdam early this week, and this value remains indicative, with activity fairly thin due to some continuing holiday absences across Europe. Buying appetite for T2 has increased - some traditional buyers of T1 for denatured markets (plus €102 duty) confirm that they are switiching from T1 to T2, with some selling T1 volumes and buying T2. Demand for physical T1 meanwhile seems to have tapered off again. Although T1 values have risen to around US$660-680 (though some are offering higher), there is some expecatation that these levels are not sustainable, and backwardation remains quite strong into Q2/Q3. A T1 trade booked at US$675 was reportedly for US material – which would be the first confirmed sale of US material into Europe this year.
