Ethanol Prices Rise on Refinery Turnarounds

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Researched by Industrial Info Resources (Sugar Land, Texas)--Fuel ethanol prices have risen over the past four-weeks, and U.S. production was up 0.5% to nearly 40 million gallons per day.

Futures markets estimate denatured fuel ethanol delivery in March indicates prices are up from $2.00 per gallon to $2.23 gallons, a 1% gain on the Chicago Board of Trade. Ethanol prices are down 9.3% from 2011 levels. Producer margins are getting tight, and the falling demand for and oversupply of ethanol, with high corn costs hovering around $6.37 per bushel, could lead some Midwestern biorefineries to cut back or idle production until profit margins improve.

Generally, the first quarter of the year is the time that petroleum refiners perform unit turnarounds, reducing production and boosting ethanol and gasoline prices. Estimates show that some 650,000 barrels per day of refined products are currently offline in the U.S. alone. About 100 unit turnarounds are under way in the major refining states of Louisiana, Texas, California and Washington.

Major refiners like BP America (NYSE:BP), CITGO, Chevron (NYSE:CVX), Coffeyville Resources, ConocoPhillips (NYSE:COP), ExxonMobil (NYSE:XOM), Motiva, Tesoro (NYSE:TSO) and Valero (NYSE:VLO) all have maintenance projects under way, for which the units will not be back online until March of this year.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.