I. Continuous Decline in Supply and Demand, Lingering Bearish Factors Remain

This week, the supply side of some fermentation ethanol units declined. In the major production region of Northeast China, Hongzhan and Xin Tianlong reduced output, while in the Northwest region, the Yushen unit was shut down. The weekly capacity utilization rate in the industry was 50.68%, down 4.21% from the previous period.

| | Weekly Actual Output | Utilization Rate |
|--- |--- |--- |
| Synthetic | 35,270 | 40.55% |
| Syngas | 4,550 | 69.19% |
| Cassava | 15,260 | 29.36% |
| Rice | 2,800 | 10.15% |
| Molasses | 2,100 | 33.00% |
| Wheat | 1,350 | 37.44% |
| Corn | 131,410 | 66.61% |
| Total | 192,740 | 50.68% |

Industry supply decreased this period. At Hongzhan Bayan and Laha, one production line was shut down; Wanli operated normally, COFCO Zhaodong produced fuel ethanol, Zhongke Gelin ran steadily, and Shenglong operated on a small line. At Jilin Fukang, lines 3 and 4 were in production, line 2 was shut down, Jilin Xin Tianlong was shut down for production, and Dongfeng Hualiang unit was shut down. SDIC Hailun and Tieling units operated normally, while the Jidong unit was shut down. The Jilin Da ethanol unit was in production. In Henan Mengzhou, three plants operated normally, while the Xinxiang unit was shut down. Sichuan Hongzhan unit was in production, Anhui COFCO unit output resumed in Bengbu, the Suzhou unit was shut down, and Shandong Qvfeng unit resumed. Coal-based ethanol supply decreased. Shandong plant units were shut down; Shaanxi Yushen Energy and Chemical unit was shut down, Xinghua maintained 30% load, and Yulin Kaiyue operated steadily. Anhui unit was in production; Guangdong unit operated normally, and Yulin Kaiyue unit operated normally; Henan Anyang operated steadily, Henan Yongcheng operated normally; Jingmen Yuanhan unit was in production; Hunan plant unit was in production; Xinjiang Tianye unit was in production.

II. Limited Stimulus from Demand, End-User Demand Remains at Low Levels

Major Downstream Capacity Utilization Rate Table

| Product | Current Period | Previous Period | Change | Next Period Direction |
|--- |--- |--- |--- |--- |
| Ethanol | 50.68% | 54.88% | Down 4.20 ppts | ↓ |
| Ethyl Acetate | 44.47% | 47.37% | Down 2.90 ppts | ↓ |
| Dimethyl Carbonate/Methyl Ethyl Carbonate | 23.00% | 25.38% | Down 2.38 ppts | ↓ |

China's weekly capacity utilization rate for dimethyl carbonate/methyl ethyl carbonate was 23%, down 2.38 percentage points month-on-month. Some units remained shut down, leading to a decline in capacity utilization. Downstream demand was mainly based on contracts; the domestic market reaction for dimethyl carbonate/methyl ethyl carbonate was average, as new contract orders were being executed. It is expected that the weekly capacity utilization rate for dimethyl carbonate/methyl ethyl carbonate will fluctuate within a narrow range in the next cycle.

The transaction center for ethyl acetate market declined. The lowest price in the East China market this week was 5,205 yuan/ton ex-factory in cash, and the highest was 5,275 yuan/ton ex-factory in cash. The weekly average price was 5,233 yuan/ton, down 227 yuan/ton from last week, a decrease of 4.16% month-on-month.

III. Supply-Demand Dynamics Outweigh Cost-Side Support, Further Affecting Future Ethanol Prices

Overall, in June, prices of domestic bio-fermentation ethanol remained stable, while coal-based ethanol prices rose slightly and then stabilized. In Northeast China, major bio-fermentation ethanol plants faced significant inventory pressure. Under the influence of an active selling mentality, prices may have room to decline. However, currently, plants are suffering substantial production losses, and increased chemical purchasing provides support that limits the downside. Some units have maintenance plans in June, which may support price stability in the later period. On the demand side, demand changes vary: chemical demand increases, while edible demand declines. In June, ethyl acetate plants that were shut down have resumed production, and dimethyl carbonate/methyl ethyl carbonate operating rates may increase. Demand from the baijiu industry continues to decrease as temperatures rise. For coal-based ethanol, supply in June has decreased, as some plants begin catalyst replacement and equipment upgrades. This supply-side positive supports stable or slightly rising prices. However, given the current price advantage of bio-fermentation ethanol, downstream chemical consumption of coal-based ethanol has declined, and prices remain stable under low inventory conditions.