February US ethanol exports surge 58% on year, 148% on month: Census

06.04.2018

The US exported 827.9 million liters (218.6 million gallons) of ethanol in February, 58% higher than a year ago and up 148% month on month, US Census Bureau data showed Wednesday.

It was the highest monthly export total on record and much higher than market expectations.

"I guess we should look at the average of January and February and use that number for January and February," said one source.

Given February's only 28 days, exports averaged nearly 186,000 b/d over the month. Market participants had expected high exports in the first quarter of the year, but last month's data showed January exports lower than expected.

Some market participants have said that Thursday's data may have included shipments to China that departed in January but were not reported until February.

Brazil was the largest buyer for fuel-grade ethanol in February, importing 390.5 million liters (103.1 million gallons) after taking 154.2 million liters in January.

Exports to Brazil are likely to taper off in the coming months as the new crop season has begun to pull ethanol prices lower and, combined with a 20% tariff on imports over 150 million liters in a single quarter, could make the arbitrage more difficult.

China appeared in the second spot after its unexpected absence in January's data. The country imported 125.2 million liters (33.0 million gallons) of fuel-grade ethanol in February, up from zero in January.

Another source said that an estimated 405.7 million liters left the US bound for China in Q1.

Low US prices in late 2017 prompted a flurry of cargo bookings to China but volumes will likely drop after the country raised its tariff to 45% from 30% earlier this week. The tariff-hike came in retaliation for US tariffs.

Canada continued its strong buying as it imported 80.5 million liters (21.3 million gallons), up from 71.9 million liters in January.

Canada is a consistent source of demand for US ethanol, frequently topping the list of buyers of US ethanol.

In 2018, S&P Global Platts Analytics forecasts US fu


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