U.S. ethanol output slumps as losses spur plant closings
Last week, Abengoa Bioenergy said it would temporarily halt ethanol production at two plants in Nebraska because of the unfavorable market conditions. And POET, another U.S. ethanol producer, said last week that it would temporarily suspend operations at its Macon, Mo.,
There are some hopeful signs for ethanol producers. Imports were down to 9,000 bpd in the latest reporting week from 67,000 bpd a week earlier. This decline comes as U.S. ethanol industry players complain about federal provisions aimed at boosting use of non-corn alternative fuels, which they say helps boost demand for Brazilian sugarcane-based ethanol.
As well, blender demand bumped up about 1 pct, though still is well below the trend line and off track from a federal ethanol blending mandate of 13.8 billion gallons for 2013.
And, RIN values have been surging lately, up roughly 10-fold since last summer. RINs stands for Renewable Identification Number and correspond to gallons of renewable fuel to meet
The advance in the thinly traded market for RINs primarily impacts the economics of the blenders and has yet to improve physical pricing much, said Linn Group analyst Jerrod Kitt.
But given overall market moves, Kitt said he believes output levels might be at a "seasonal bottom."
"The market is attempting to stimulate more blending demand," Kitt said. "It's all about meeting the mandate, and at the moment, ethanol production is running far shy of what's
mandated for 2013."
Self-contained hydraulic system with power cables (hydraulic). Tandem Henschen axles (hydraulic). Hydraulic fenders. Manual or hydraulic tilt. 6,500-gallon tank.
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