The premium of T2 ethanol over the front-month paper contract fell Eur10/cu m Thursday to minus Eur1/cu m, the lowest level seen since mid-February last year as the physical price fell on low spot demand, while a closed arbitrage and lower imports supported March paper.
The T2 ethanol assessment slipped Eur10/cu m on Thursday, reaching an 11-month low of Eur497/cu m (about $551/cu m), as sellers did not find potential buyers for their proactive offers, and sought the bottom of the current European ethanol market.
Spot demand during the first two months of the year remains slow, as seasonally expected, with the bulk of the business done on long-term contract.
However, a closed arbitrage and lower levels of imports from central America, compared with last year, will bring support back into the market, sources said, and kept the front paper contract steady during Thursday trading.
The March contract was assessed at Eur498/cu m, unchanged on the day.
EU producers stocking up volumes near the end of March to cover maintenance period are expected to give additional support to prices.
