Prices drop in the 2nd fortnight of June, but averages are still higher than in late May

Cepea, July 2, 2020 – Hydrous ethanol prices dropped in the second fortnight of June, pressed down by purchasers’ lower interest in the biofuel and the slight supply increase in the market of São Paulo State. Besides, the volume sold without ICMS increased in that period too. In general, demand weakened, and only sporadic deals were closed.

 

In the last week of the month, some refineries’ needs to make cash flow pressed down quotes too, since sellers were more willing to lower asking prices. Despite these decreases in the second half of June, ethanol prices rose in the first fortnight of June, which underpinned the average price compared to that in late May.

 

Between June 22 and 26, the CEPEA/ESALQ Index for hydrous ethanol closed at 1.6166 BRL (zero PIS/Cofins and zero ICMS), 6.64% up compared to that in the last week of May.

 

In general, demand has been lower this season. Cepea data show that the volume of hydrous ethanol traded in the spot market of São Paulo in the 2020/21 season (from April/2020 to June 19, 2020) is 45% lower than that in the same period last crop.

 

As regards anhydrous ethanol, the CEPEA/ESALQ Index decreased slightly in the last week of the month, due to lower demand, which considerably reduced the volumes marketed by distributers in the spot market.

 

However, considering the whole month of June, the Index increased. The CEPEA/ESALQ Index averaged 1.8712 BRL (zero PIS/Cofins) between June 22 and 26, 12.7% up compared to that in the last week of May. Firm demand in the spot market most of June underpinned prices in SP.

 

As for the daily Index, the ESALQ/BM&FBovespa Index for the hydrous ethanol delivered to Paulínia (SP) closed at 1,669.50 BRL/cubic meter (zero taxes) on June 30, stable (-0.06%) compared to that on May 29.

 

(Cepea-Brazil)

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