Ethanol prices still higher in New York Harbor on logistics

Houston (Platts)--9Jun2006

Ethanol prices have again hit new highs in New York Harbor on supply and
logistical issues, as sources put the prompt market at $4.50-4.60/gal, FOB New
York Harbor.

Time trade prices were also showing extreme strength, with traders
looking for delivery by June 10 to give back by June 20 were paying 65 to 75
cents/gal for the privilege.

On Thursday, New York Harbor ethanol was assessed at $4.10 to $4.11/gal.
The NYMEX July reformulated blendstock for oxygenated blending contract was
trading Friday afternoon at $2.305/gal, up 2.63 cents.

Wholesale ethanol rack price increases have slowed but not stopped this
week, as major markets like Minneapolis showed hikes Friday. Major sellers,
including Aventine, were showing $3.59/gal, up 3 cents/gal, while MinnIowa hit
$3.60/gal, up 2 cents.

The average rack price in Minneapolis was $3.56/gal on Friday; on May 1
the same price was $2.64/gal. Averages in Des Moines have gone from $2.70/gal
to 3.65/gal since May 1; Omaha went from $2.70/gal to $3.53/gal.

The problem appears to be related to logistics more than supply, said
market participants. Earlier in the week, BP paid $4.25/gal for 10,000 barrels
delivered to New York Harbor by truck. The fact that the material had to be
supplied by truck implies that rail and barge capacity have been stretched to
the limit, market sources said.

Similarly, Brazilian exports appeared cheap at $2.20/gal done recently for
June delivery. Those barrels could come to the US, but some potential buyers
lack storage or government issued Distilled Spirit Permits, required when
ethanol imports come in (as they do most time from Brazil) in a non-denatured
state.

For similar news, take a trial to Platts Petrochemical Report at
http://petrochemicalreport.platts.com.


 

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