Asian ethanol was assessed at a low of $683/cu m CIF Philippines Tuesday, because of a lack of support in the market, trading sources said.
It's the lowest level since Platts started assessing the gasoline additive on March 7, 2011, when it was assessed at $817.50/cu m CIF Philippines.
Demand for ethanol grew in 2011, prompted by the country's E10 mandate, which required that gasoline sold in the country should have a 10% ethanol blend. Partial implementation of the mandate began in August 2011 and full implementation on February 6 this year.
But the demand for imported ethanol has slid since the Philippine Department of Energy set out a circular in December 2011 mandating prioritization of locally produced ethanol.
As such, representatives from oil companies stressed that the current priority is sourcing local material.
A trader said that buyers in the Philippines buy imported ethanol on a "hand-to-mouth" basis on account of this regulation, leading to aggressive offers and thin trade.
"The market is very quiet. Only one trading company is moving cargoes at the moment. They will ship one cargo in May from Vietnam at $640/cu m FOB Lien Chieu and another one in June bought at $635/cu m," according to another Singapore-based trader.
Sources confirmed that for bulk shipments, the freight rate amount to $30/cu m, and considering other costs, the landed cost of these shipments would be at least $660-670/cu m CIF Philippines.
Similarly, in Thailand, offers for bulk shipments have slumped from $640-680/cu m FOB Thailand last month to $620-660/cu m.
As such, the transactable range was submitted at $670-690/cu m CIF Philippines.
