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U.S. ethanol industry says inching back from collapse

May 20/2020

MOSCOW (MRC) -- The U.S. ethanol industry is showing some signs of recovery as government officials ease stay-at-home orders that depressed fuel demand, while a vote Friday in Congress could bring the industry one step closer to federal aid, industry officials said, as per Hydrocarbonprocessing.

Fuel demand collapsed by about a third with the spread of the novel coronavirus this spring, and U.S. ethanol production capacity halved as around 150 facilities either idled or reduced rates. Now as restrictions ease and gasoline demand inches higher, about 140 facilities are idled or running at reduced rates, Renewable Fuels Association President Geoff Cooper said on Friday.

It seems the worst may be behind us, Cooper said in a call with reporters. But make no mistake, we still have a very long way to go to climb out of the hole that COVID-19 put us in."

U.S. production of ethanol - a corn-based fuel that refiners must blend into their gasoline - has increased since the start of May, rising to 617,000 barrels per day in the week to May 8, U.S. Energy Information Administration data showed. Production bottomed at the end of April, at 537,000 bpd.

Output is still down more than 40% from year-ago levels, though. And while inventories fell in the most recent week to 24.2 million barrels, stored supply is still nearly 9% higher than the same time last year, EIA data showed.

We are seeing inventories come down, but we need to see frankly many more weeks of that to get this thing back into balance, said Neil Koehler, chief executive of Pacific Ethanol.

The increased production comes as Congress readies a vote on Friday for a coronavirus relief bill that includes aid for the biofuels industry. After assistance to the industry failed to make its way into the first relief package from Congress, advocates hope that the new bill will pass the House of Representatives on Friday before moving on to the Senate.

The bill, introduced by House Democrats, would reimburse producers that suffered unexpected market losses because of the pandemic from Jan. 1 through May 1.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
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