Ethanol Blog

Spot Ethanol Prices Pressured by Weak Fundamentals

By George Orwel , DTN Energy Reporter

Spot ethanol prices continue to be under pressure due to weak demand and rising supply, with the risk of negative producer margins threatening many ethanol plants, a trader said.

The trader offered a bearish short to medium term outlook for the ethanol market, saying he expects a number of production plants to be idled in early 2013, as imports from Brazil saturates the market while the weak economy keeps consumption down.

"Our plant shut down back in June temporarily ... we are waiting for the economics to improve," he said. "I expect more plants to close at the beginning of the year because of negative margins. Demand is weak, for sure, and imports are increasing."

George Orwel can be reached at george.orwel@telventdtn.com

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