China's total imports of ethanol hit a new record of 135,865 cu m in November, according to official data from the General Administration of Customs released Tuesday, with a surge in inflows of the denatured variant used for fuel blending.
The November figure beat the previous record set in September, when total inflows hit 121,625 cu m. It was also 97% higher month-on-month.
The ebb in imports for denatured ethanol seen in October proved to be temporary, with both the United States and Brazil accounting for almost all of the volume entering China in November.
Total imports of denatured ethanol in November were 131,438 cu m, while the year-to-date figure for 2015 is 298,751 cu m.
The US shipped its largest-ever volume of denatured ethanol into China in November at 84,094 cu m, more than triple the 27,805 cu m in October. It was also more than double the 41,629 cu m in September.
Brazil also saw a resurgence in its exports into China at 46,712 cu m, although this was slightly lower than in September when it supplied 48,037 cu m. But it was a stark contrast to October when volumes were just 3,164 cu m.
Other sources of denatured ethanol included South Africa, which sent 627 cu m to China.
Imports of undenatured ethanol fell 88% month-on-month to 4,427 cu m, with Pakistan accounting for the bulk at 4,418 cu m.
The South Asian producer shipped 37,989 cu m in October. The fall was likely due to lower supplies during the intercrop season in the third quarter.
The resurgence of denatured ethanol imports in November resumes a trend seen over recent months, as Chinese oil companies take advantage of the arbitrage from the Western hemisphere to purchase fuel-grade ethanol for gasoline blending.
The rise was not unexpected as shipping sources had earlier indicated fixtures of several medium to large-sized vessels carrying ethanol into Chinese ports for November deliveries.
There is currently an E10 mandate in force in nine Chinese cities and provinces, ensuring demand for fuel-grade ethanol remains high despite low oil prices.
With the market no longer expecting a rise in the import duty for denatured ethanol in 2016, trade sources said they expected the high inflows to become the new normal despite a recent fall in domestic ethanol prices, as the arbitrage remained workable.
