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Price Assessment

Platts NNE Brazil Anhydrous Ethanol Price Assessment

  • What is NNE Brazil anhydrous ethanol?
  • How do we assess NNE Brazil anhydrous ethanol?
  • Weekly Assessment Commentary
  • Weekly Assessment Rationale
  • Market price heards

What is NNE Brazil anhydrous ethanol?

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Platts NNE Brazil anhydrous ethanol assessment the weekly price benchmark for physical ethanol delivered into Suape, Pernambuco, in northern Brazil.

The assessment reflects anhydrous ethanol Delivered at Place in Suape and takes into consideration ethanol produced regionally, imported from the Center-South region as well as volumes delivered from international locations.

How do we assess NNE Brazil anhydrous ethanol?

The NNE Brazil Anhydrous assessment reflects the weekly tradeable value of a spot anhydrous ethanol at Suape 1-15 days forward from the date of publication, based on trades, bids, offers and indications of tradeable value reported to S&P Global Platts pricing specialists.

Platts editors engage directly with producers, consumers, traders, brokers, and shippers to gather price information. Platts publishes this information and uses it to assess values. The information gathered through market surveys is considered in the final assessment.

These inputs are published throughout the day, in real-time, in the form of "market heards", to allow Platts to test the information, which forms the basis of the assessment and for market participants to give feedback on those inputs.

The assessment reflects a minimum volume 250,000 liters, or 250 m3, maximum volume 1,000,000 liters, or 1,000 m3. Other volumes may also be considered but in relation to the assessed volume range. Platts considers standard payment terms, such as payment within 10 days of delivery.

Weekly Assessment Commentary

**US ethanol import arbitrage closed in Real 18/cu m for non quota market
**Anhydrous ethanol stocks in the NNE down 8.9% year on year

Anhydrous ethanol price in Brazil's North-Northeast region moved up Real 35/cu m in the week that ended Friday, January 24, well supported by the small availability in the region. S&P Global Platts assessed anhydrous ethanol DAP Suape at real 2,550/cu m, the highest price ever assessed. Platts launched this assessment back in November 2017.

This upward movement has been observed since the beginning of January as mills were not in a rush to sell anhydrous and the imported availability was thin. Anhydrous ethanol stocks in the North-Northeast was recorded by the Ministry of Agriculture and Livestock, or MAPA, at 147 million liters as of December 31, a drop of 8.9% year on year and the lowest for the period since Platts started to track it in 2009.
The lower stocks are a reflect of a huge fell in the Brazilian ethanol import in 2019 recorded at 1.01 billion liters or 25% drop year on year.

Mills from Pernambuco and Alagoas states were seen offering anhydrous in the spot market at Real 2,510/cu m, also the last level heard traded on Friday in Pernambuco state. "Unlike to what was observed in the prior years, mills were not lowering the price to attract new demand," said a regional distributor. Imports were also limited in the spot market and just one seller was placing spot offers at Real 2,560/cu m.

According to Platts calculations imported anhydrous ethanol delivered CIF Suape, without the 20% import tariff, was valued at Real 2,152/cu m, a drop of Real 29/cu m week on week, which was attributed to a cheaper US ethanol. The lower import cost, combined with higher regional prices reflected in a wider open import arbitrage at Real 398/cu m for producers with import quota, while the out of quota market, paying 20% import tariff, was valued at Real 2,568/cu m, a marginal closed arbitrage of Real 18/cu m or less than $4.50/cu m.

A few vessels are expected to enter the country in February and March, however the price impact of this higher availability in the near term was still not possible to be tracked.

Weekly Assessment Rationale

DAP Suape anhydrous ethanol for one to 15 days forward from date of publication was assessed at Real 2,550/cubic meter Friday, up Real 35 week on week.
The assessment considered the last-trade heard in the market Thursday, of 500 cu m, DAP Suape at Real 2,550/cu m and outstanding offers at Real 2,560/cu m. A trade of 90 cu m was reported Friday basis ex-mill Pernambuco, which has a freight of Real 40/cu m to Suape hub, but this volume was below the 250 cu m minimum considered in the Platts methodology.

Market price heards

Delivery time: 1-15 days forward

Heards published on January 24

Quality Indication / Volume Price Location

Anhydrous

Offer

Real 2,510/cu m

ex-mill Alagoas

Anhydrous

Offer

Real 2,510/cu m

ex-mill Pernambuco

Anhydrous

Offer

Real 2,520/cu m

ex-mill Pernambuco

Anhydrous

Offer

Real 2,550/cu m

ex-mill Rio Grande do Norte

Anhydrous

Offer

Real 2,560/cu m

DAP Suape

Anhydrous

Ind. Value

Real 2,550/cu m

DAP Suape

Anhydrous

Traded (90 cu m)

Real 2,510/cu m

ex-mill Pernambuco

Anhydrous

Traded "Thu" (500 cu m)

Real 2,550/cu m

DAP Suape

Hydrous

Offer

Real 2,180/cu m

ex-mill Pernambuco (inside of the state)

Hydrous

Offer

Real 2,250/cu m

ex-mill Paraiba (out of the state)

Hydrous

Traded (1,500 cu m)"Tue"

Real 2,180/cu m

ex-mill Alagoas (out of the state)

Hydrous

Traded (350 cu m)

Real 2,190/cu m

ex-mill Alagoas (out of the state)


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