Introduction: Due to the concentrated maintenance of several units in the previous period, the ethanol operating rate remained low in June, leading to a temporary relief of the supply-demand imbalance. Based on current maintenance plans, the capacity utilization rate is expected to continue rising in July. Affected by the oversupply situation, regional prices are undergoing volatile adjustments.
I. Regional Supply Increases, Units Resume Operation Periodically
Table 1: Regional Ethanol Operating Rate Changes
| Region | Current Period | Previous Period | Change |
|---|---|---|---|
| Northeast | 54.86% | 56.18% | -1.32% |
| North China | 40.06% | 40.06% | 0.00% |
| East China | 50.49% | 50.49% | 0.00% |
| South China | 33.53% | 30.72% | 2.82% |
| Central China | 34.01% | 25.74% | 8.27% |
| Northwest | 69.63% | 69.63% | 0.00% |
| Southwest | 14.73% | 14.73% | 0.00% |
| Total | 47.78% | 46.42% | 1.36% |
Supply side changes: On-site supply increased slightly. During this period, the supply of bio-fermentation ethanol rose, with Hongzhan Laha resuming production, the Jilin Fukang unit shutting down, and Henan Hanyong returning to normal. The Hongzhan unit is operating normally; Wanli is shut down; COFCO Zhaodong fuel ethanol production is normal; Zhongke Gelin is stable; Shenglong is shut down; Jilin Fukang unit is shut down; Jilin Xintianlong is in production; Dongfeng Hualiang unit is shut down; Zhalantun unit is shut down; SDIC Tieling and Hailun are feeding materials from Thursday, with the Jidong unit in production; the Jilin large ethanol unit is in production. Three units in Mengzhou, Henan are producing normally, while the Xinxiang unit is shut down; the Sichuan Hongzhan unit is shut down; the Anhui COFCO unit is in production with two lines in Bengbu, but Suzhou is shut down; the Shandong Qifeng unit is in production. The Guangxi COFCO unit is in production; the Guangxi Xintiande unit has reduced output; the Guangxi Jinyuan unit has started with small shipments. Coal-based ethanol supply remains stable. The Shandong factory unit is shut down; Shaanxi Yushen Nenghua is normal; Xinghua factory maintains a 30% load; Yulin Kaiyue started steadily; the Anhui unit is in production; the Guangdong unit is stable; the Yulin Kaiyue unit is normal; Anyang, Henan started steadily; Yongcheng, Henan is normal; the Jingmen Yuanhan unit is in production; the Hunan factory unit is in production; the Xinjiang Tianye unit is in production.
Supply volume data changes: In June 2026, the ethanol operating rate was 45.10%, with a production volume of 756,000 tons. Based on current data statistics and forecasts, the on-site operating rate for July is expected to be 47.89%, with production of approximately 813,400 tons, an increase of 47,400 tons month-on-month.
II. Limited Demand Follow-up, Traditional and Chemical Demand Still in Off-Season
Table 2: Capacity Utilization Rates of Key Downstream Sectors
| Product | Current Period | Previous Period | Change | Next Period Direction |
|---|---|---|---|---|
| Ethanol | 47.78% | 46.42% | Up 1.36 pp | ↗ |
| Ethyl Acetate | 37.16% | 40.99% | Down 3.83 pp | ↘ |
| Ethyl Methyl Carbonate | 21.50% | 18.83% | Up 2.67 pp | ↗ |
China's weekly capacity utilization rate for ethyl methyl carbonate was 21.5%, up 2.67 percentage points month-on-month. On-site units restarted, driving the increase in capacity utilization. Downstream demand is primarily contract-based, and the domestic ethyl methyl carbonate market reaction has been moderate, with new contract orders being executed. The weekly capacity utilization rate for domestic ethyl methyl carbonate is expected to fluctuate narrowly in the next period.
The ethyl acetate market saw strong bullish sentiment, but as prices rose rapidly, downstream buyers gradually resisted taking goods. Due to limited substantive demand-side follow-up and the need to consume earlier low-priced stocks, traders actively sold for arbitrage, with some seeking to lock in profits, leading to weaker buying interest in many regions. However, with substantial supply reductions, factories largely maintained firm offers, showing very limited willingness to concede.
Baijiu (Chinese liquor) demand remains weak, as it is in the traditional off-season, with limited recovery expected in the short term.
III. Regional Ethanol Prices Decline with Fluctuations, Bearish Sentiment Remains High for Future Market
In Northeast China, for bio-fermentation fuel ethanol, policy grains were released, lowering production costs. With rising operating rates in Heilongjiang, prices may trend downward. Downstream demand has decreased, with both chemical and edible demand declining. For downstream chemicals, Sopoo and Huayi's ethyl acetate units plan shutdowns; Hualu's ethyl methyl carbonate unit plans a shutdown at the end of the month, while Shida (Wuhan) and Lihuayi are expected to resume production around the same time. Shandong Dehua's ethylamine unit has maintenance plans in July, while other chemical producers are purchasing on a just-in-time basis. Baijiu demand is declining. For coal-based ethanol, supply is rising in July, with Yushen and Hengxin units resuming production, creating a bearish supply-side outlook. As supply increases and downstream chemical demand falls, factory inventories are rising, and prices may trend weakly downward.
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