In New York, Reuters reports that “U.S. ethanol producers are feeling the pain as margins on the corn-based fuel slumped this week to an eight-year low for this time of year, weighed by concerns over lower fuel demand from the coronavirus and the recent collapse in oil prices.”
According to Reuters, “The coronavirus outbreak is sapping demand for fuel as countries restrict travel and local governments try to prevent the spread of the outbreak. Because the United States requires ethanol to be blended into the nation’s fuel pool, gasoline consumption plays a role in demand for the corn-based fuel. With falling gasoline prices and lower expected gasoline demand, some market participants said it’s only a matter of time before ethanol plants decide to cut rates or shut.”
“At least half of the industry is bleeding red ink right now,” said Mitch Miller, chief executive of Carbon Green BioEnergy in Lake Odessa, Michigan.
“I have concern about ethanol margins,” RFA chief economist Scott Richman said. “What we don’t know right now is what’s going to happen to gasoline demand.”
“In our industry I would expect to see announcements similar to what we saw in July and August when margins were at similar levels,” said Nick Bowdish, chief executive of Elite Octane near Atlantic, Iowa, and Siouxland Ethanol near Jackson, Nebraska.
This articles was originally posted at: https://www.biofuelsdigest.com/bdigest/2020/03/15/oil-collapse-and-coronavirus-causing-u-s-ethanol-industry-to-bleed-as-margins-slump-to-8-year-low/ on