Ethanol, Fuels and Co-Product Pricing
Market Outlook: U.S. ethanol prices ended last week 1.3 percent higher but reversed that trend in early week trading and fell 1.2 percent through Tuesday’s close. Midwest wholesale rack ethanol prices were lower to end last week but were up 0.1 percent through Tuesday’s market close to their last quote of 66.94 cents/liter (253.39 cents/gallon).
FOB Houston ethanol prices finished last week 0.3 percent higher but are down 0.4 percent through Tuesday’s trading from Friday’s close. FOB Houston ethanol prices are quoted at 66.45 cents/liter (251.53 cents/gallon). FOB Santos, Brazil anhydrous ethanol prices were lower last week; they are down in early week trading, falling 5.5 percent to 65.03 cents/liter (246.15 cents/gallon) through Tuesday’s trading.
The FOB Gulf-Santos, Brazil ethanol spread has narrowed from last week’s close through Tuesday’s trading and is currently at 1.42 cents/liter (5.38 cents/gallon).
MTBE prices fell 5.2 percent last week and extended those losses in early week trading to fall 3.3 percent from Friday’s close through Tuesday’s trading. MTBE’s premium to FOB Houston ethanol has decreased from last week’s report and stands at -1.87 cents/liter (-7.07 cents/gallon).
BTX component prices were sharply lower last week and were weaker still through Tuesday’s market close: Benzene was down 3.4 percent while Toluene was down 3.4 percent, and Xylene was down 3.3 percent. The estimated weighted average aromatic price is currently 95.55 cents/liter (361.68 cents/gallon), down from last Friday’s close. The BTX-Houston ethanol spread narrowed last week, and the weighted average BTX price is 29.1 cents/liter (110.15 cents/gallon) higher than the FOB Houston ethanol price.
Gasoline and petroleum products were lower last week but are pushing higher in early week trade. RBOB futures are up 4.2 percent to start the week while 84 octane RBOB (Houston) and 87 octane CBOB (U.S. Gulf) gasoline prices are up 4.1 and up 4.5 percent, respectively. WTI futures are 3.1 percent higher at $73.53/barrel while Brent futures are up 2.8 percent to $77.44/barrel, from Friday through Tuesday’s close.
Liquid tanker rates are 1 percent higher on average this week with offers for the U.S. Gulf to South Korea seeing the largest gains (up 1 percent). Freight from the U.S. Gulf to the East Coast of Mexico saw the largest declines and is down 13 percent from last week. On average, tanker freight from the U.S. Gulf is unchanged this week while freight from the PNW has posted a 4 percent increase. Liquid tanker freight rates from Brazil are up 1 percent, on average, this week. Freight rates across all origins are 15 percent lower than this same week in 2022.
On a cost-and-freight (C&F) basis, offers are mostly lower this week as lower FOB offers for ethanol have outweighed gains in liquid tanker freight rates. Prices for ethanol C&F to Central America from the U.S. Gulf are down 0.3 percent this week and are down 11.9 percent from this same week in 2022. Values for PNW ethanol to Southeast Asia average $920.43/MT this week, down 4.6 percent from the prior week but down 18.2 percent year-over-year. That compares to U.S. Gulf to Southeast Asia C&F prices that average $963.18/MT and are up 0.3 percent from last week but are down 11.1 percent year-over-year. C&F prices for Brazilian ethanol to Southeast Asia are down 5.4 percent from last week.