Supply costs remain under pressure; the ethanol market experiences volatile adjustments.

1. Analysis of Ethanol Production Trends and Capacity Utilization

Ethanol production maintained high levels from September to November 2025, with capacity utilization rates rising in tandem. Since December, both production and capacity utilization have generally fluctuated downward. The capacity utilization rate reached a staged low point in June, followed by a slight recovery in July and August, accompanied by a corresponding rebound in production.

Comparing the operating conditions of 2025 and 2026 reveals distinct differences in ethanol capacity utilization trends. In the first half of 2026, overall operations showed a pattern of initial decline followed by fluctuating recovery. In contrast, operations continued to rise throughout the second half of 2025, resulting in higher overall utilization levels later in the year compared to the same period in 2026.

2. Regional Operating Status of Bio-fermentation Ethanol

• Northeast Region: Overall operating levels increased. Both Hongzhan plants maintained production. Jixian and Huanan units shut down in mid-month. Guotou Tieling, Hailun, and Jidong units operated normally. The Wanli unit ran smoothly this month. The Jilin Xintianlong unit operated normally, while the Jilin Dongfeng Hualiang unit remained shut down.
• Inner Mongolia Region: The Zhalantun unit resumed production, and the Chifeng Ruiyang unit also restarted, restoring regional supply.
• East China Region: Operating levels declined slightly. Anhui COFCO maintained stable operations, with Bengbu Plant and Anhui Wanshen units running normally. The Huating unit experienced a brief shutdown before resuming production.
• Henan Region: The Mengzhou Houyuan unit underwent a brief shutdown, while other factories in the region operated normally. The Xinxiang unit resumed production.
• Guangxi Region: Operations remained stable. Guangxi COFCO, Guangxi Jinyuan, and Guangxi Xintiande units produced normally. Among molasses-based ethanol producers, only Haiying maintained production; all other molasses ethanol units were shut down, relying on prior inventory for sales.
• Coal-to-Ethanol Units: The coal-to-ethanol sector saw a slight increase in operating rates. Henan Ruibai’s unit was shut down, and Xinjiang Tianye’s unit ceased operations in mid-month. Henan Liyuan, Hubei Jingmen Yuanhan, Hunan Petrochemical, Anhui Tanxin, and Shandong Hengxin units all maintained normal operations.

3. Monthly Supply-Demand Balance Analysis of Ethanol

Supply-Side Interpretation

In September, ethanol production decreased by 47,600 tons month-on-month, a drop of 5.70%. Import volumes contracted sharply to 200 tons, a month-on-month decline of 94.44%. Under these dual impacts, total supply fell by 6.08% month-on-month. Looking ahead to October, domestic ethanol production is expected to rebound to 820,000 tons, with imports recovering slightly. Total supply is projected to increase by 4.15% month-on-month.

Demand-Side Interpretation

In September, domestic downstream demand fell by 20,000 tons month-on-month, a decrease of 2.59%. Export volumes dropped from 63,600 tons to 35,400 tons, a significant month-on-month decline of 44.34%, driving total demand down by 5.78% month-on-month. For October, domestic demand is expected to recover modestly, with both downstream consumption and exports seeing slight increases. Total demand is projected to rise by 1.48%.

4. Downstream Demand Analysis

• Baijiu Industry: Ethanol demand from the baijiu sector declined this month.
• Ethyl Acetate: Operating rates in the ethyl acetate industry were relatively low in August. Yankuang’s unit resumed production around the 20th, and Anhui Huayi’s unit restarted around September 9th.
• Diethyl Carbonate: Industry operating rates fell, with Hualu and Lianhong units shutting down.
• Acetaldehyde: Mingde’s unit was shut down, while other plants maintained normal production loads.
• Major Traders and Refineries: Procurement was primarily driven by immediate needs, with no large-scale stockpiling activities observed.

5. Market Summary

Based on supply-demand data comparisons, total ethanol supply in September slightly exceeded total demand, indicating an oversupplied market. Pressured by fundamental supply-demand dynamics, ethanol prices exhibited a volatile downward trend. Looking forward to October, the anticipated rebound in production will lead to increased supply, while the demand side is expected to see only minor recovery. Consequently, the ethanol market will continue to face supply pressure.