Haxo Bioenergy

Renewable, Sustainable, Low Carbon Biofuels and Clean Energy Company

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Ethanol - ETBE (Week Report)

ETHANOL – T2 markets suffered a drop early this week, while the T1 market has endured choppy conditions, bouncing back to US$595-600/cu m mid last week, but weakening to the US$570s-580s early this week. Two-tier pricing continues to emerge however, as US$598-600 was also reportedly booked Monday possibly for Brazilian origin, with lower offers and trades in the US$570s booked Tuesday heard for “any origin” T1. Greater availability is the culprit – with more US material suggested to be a driver. The drop in T2 seems to be due largely to fallout from weaker T1 values, and also adequate supply; €499/cu m FOB Rdam was heard traded on Monday. We also heard €499 as a DDU (delivered duty paid) Q2 offer level being shown to consumers. Press reports said Ensus has produced and is delivering its first commercial volumes of ethanol this week. EU producers are no doubt concerned at the dip below the psychological €500 level, which threatens to get painfully close to production costs, despite ongoing relatively low grain feedstock costs.

Posted March 4, 2010