Chemical tanker Bochem Oslo is preparing to load a substantial volume of ethanol from Rotterdam before heading to Fujairah, in the United Arab Emirates, as multi-year low European prices beat competition from the US and Brazil, market sources said Thursday.
European ethanol trading sources said that one or more parcels topping 25,000 cubic meters (94.5 million gallons) could be loaded on Bochem Oslo for discharge in the Middle East, a key ethanol importer from the US.
A slump in European prices caused by excessive inventory and lackluster consumption in the 28-nation single market turned suppliers focus to Rotterdam in search of better returns.
Wholesale ethanol sold in FOB barges in the port of Rotterdam, where European prices are assessed, fell to Eur442/cu m on February 19, or 35% off its 2013 peak to a 45-month low.
Market sources said that one or more European producers sold the export volume at a Eur20/cu m discount to open-market spot pricing in order to lure in shippers and clear a supply glut that has pressured prices in the region.
Europe has become a more attractive origin for ethanol traders after logistical disruptions caused by extreme weather in the US resulted in a draw down in inventories along the Gulf Coast and New York harbor, where most export terminals are based.
Ethanol supply from Brazil, the world's second largest producer of the biofuel after the US, has also tightened in recent weeks as the country's Center South region goes through its December-April sugarcane inter-crop season.
