Singapore — Chinese traders are looking to buy prompt industrial ethanol for medical purposes and ship them back to China, trading sources in Vietnam and Singapore said over the weekend.
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"Supplies [of industrial ethanol] though, are tight in Vietnam at the moment. [These are] utilized for domestic purposes following the outbreak of the coronavirus in China, which had led to an increase in demand for medical grade ethanol in Vietnam," a trader in Vietnam said.
Thailand was mooted as another possible supplier of industrial ethanol, although prices were reported at above $900/mt, making it costly to ship the ethanol to China. In addition, the demand is for prompt cargoes as the cargoes need to reach China in less than a month as it is uncertain how long these supplies will be needed.
Another trader with storage tanks in Ulsan, South Korea, also reported of buying interest from Chinese traders but was unable to conclude a deal as he was not able to ship to China in drums.
"China has adequate ethanol supplies, the difficulty is getting the supplies to where it is needed, the trader said.
Trading sources had pegged Chinese industrial ethanol, which can be used for medical purposes, at Yuan 6,000-6,500/mt ex-factory, up from Yuan mid-5,000/mt reported prior to the Lunar New Year, owning to the spike in demand.
Chinese ethanol factories that remained in operation during the Lunar New Year holidays are churning out medical-grade ethanol at an increased pace.
"China, I believe have enough capacity to produce the medical purpose ethanol, though roadblocks and various restrictions on travel coupled with the unwillingness of truck drivers to head towards certain locations, will cause delay in resupply," a Chinese ethanol producer, who had just completed transporting a batch of medical grade industrial ethanol to Hubei province, said.
"There could be demand [for industrial ethanol] in [China's] southern provinces, such as Guangzhou which has only a few ethanol factories, [but] is near Vietnam and Thailand. It will be easier to import from these countries rather than from the northern part of China [given] disrupted traffic," he added
For 2019, China imported a total of 104,021 cu m of ethanol, a 90% decline compared with the 1,034,553 cu m of ethanol which was imported in 2018, China's customs data showed. Trade tensions between China and the US, which started in 2018, had caused imports from the US to fall.