Industrial Ethanol Category Intelligence
Report Coverage
- Global Market Production
- Global Supply-Demand Analysis
- Global Trade Dynamics
- Regional Market Outlook- North America, US, Europe, Brazil, Asia
Industrial Ethanol Market Overview
The production of industrial ethanol is projected to increase from about 115.6 billion litres to nearly 128.4 billion litres by 2025. The biggest manufacturer of industrial ethanol is Asia and it is also the largest consumer of industrial grade ethanol, holding nearly 50 percent of the global market share. The second largest consuming region for industrial grade ethanol is Europe with a broad support from industries such as personal care (15 percent), cleaning products (10 percent) and food & beverage (10 percent), accounting for more than 2.5 billion litres. The growth in these sectors significantly impacts the ethanol demand market.
The ethanol industry is highly fragmented with well over 2,500 producers globally. However, a major portion of these producers manufactures fuel-grade ethanol with very few industrial ethanol productions. The report covers the best industry practices for the procurement of industrial ethanol that takes place through a contract, as industry buyers tend to perform procurement on a bulk basis. To reduce the exposure to supply risk, industrial ethanol buyers usually purchase a mix of 80:20 ratio, i.e., 80 percent under contract and 20 percent under spot buying.
Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.
Industrial Ethanol Market Trends
Category Intelligence on Industrial Ethanol covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
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Industry Outlook & Drivers
Industrial Ethanol Global Market Outlook
The global industrial ethanol market is set to grow at a CAGR of 2-3 percent over the next five years
- Non-fuel ethanol accounts for approximately 16 billion liters of the total ethanol production. In other words, 13-15 percent of the total ethanol consumption is for non-fuel applications such as chemicals, plastics, pharmaceutical and beverage industries, including cosmetics, cleaning products, paints and alcoholic drinks
- Key regions driving growth: Growth in Asia, Brazil and Europe will be driven by the demand from the solvents and chemical intermediates sector
Industrial Ethanol Demand Market Outlook
The global non-fuel ethanol market is balanced in mature markets like the US and Europe, having sufficient supply; while demand is marginally higher in the emerging markets like China and Brazil
- Brazil is looking to leverage on the existing capacities and reducing exports, while China is dependent on imports from other Asian markets
Industrial Ethanol Global Market Production
Non-fuel ethanol (or ethyl alcohol) is used in the manufacturing process for a wide range of products in industries across chemicals, plastics, pharmaceutical and beverage industries, including cosmetics, cleaning products, paints and alcoholic drinks. Its use in applications other than fuel blending accounts for approx. 5.4 billion gallons (20 billion litres) of ethanol.
Industrial Ethanol Global Supply-Demand Analysis
Demand and production is expected to grow in tandem and the market is expected to remain balanced with a very narrow supply-demand gap
- Asia is the center for industrial ethanol market, as it is the largest producer as well as consumer of industrial grade ethanol, accounting for slightly over 50 percent of the market
- Europe, with its large base of pharmaceutical, personal care and food & beverage industries, is the second largest consuming region for industrial grade ethanol, accounting for more than 2.5 billion litres
Market Outlook
- The global ethanol production is projected to increase modestly during the outlook period from about 116 billion liters in 2018 to nearly 138 billion liters by 2023
- More than half of this increase is expected to originate from Brazil mostly to fill domestic demand. The second largest contributor to the expansion in ethanol production is Thailand followed by Brazil
- Recent capacity additions in Europe, which is a major consumer (importer) of non-fuel ethanol, will bring down its dependency on other exporting markets such as South America and Asia (Pakistan)
Engagement Outlook –Change in Procurement Pattern
Europe may not continue to get regular material from Asia (Pakistan)
- It is imperative that buyers in Europe look for alternate sourcing destinations as in recent times, the market was heavily reliant on material from Asia, and particularly from Pakistan, which is changing with China pulling significant material from Pakistan
- China has been drawing substantial amount of industrial ethanol from Pakistan as it is cost effective in comparison to the domestic ethanol prices and it makes it even more attractive for sellers in Pakistan, as there are no import duties owing to the Free Trade Agreement with China
Industrial Ethanol Global Demand by Application
- Globally, solvents occupy the lion's share of the industrial ethanol demand market, at 63 percent, and is expected to grow at a CAGR of 3 percent . Chemical intermediates, which account for 37 percent of the global demand share, is expected to grow at a slightly higher growth rate of 3.5 percent over the next three years
- Applications pertaining to CPG & FBT markets have a significant share in the total demand market: Personal care (15 percent), cleaning products (10 percent) and food & beverage (10 percent). Hence, growth in these sectors significantly impact the ethanol demand market.
- Solvents: Paints, inks and the coating sector has the major share in demand, consuming 27 percent of industrial ethanol. This is followed by the personal care sector and cleaning products end applications, which accounts for 23 percent and 16 percent of the demand respectively
- Chemical intermediates: Acetic acid and acrylates are the major consumers of industrial grade ethanol, accounting for 29 percent and 28 percent respectively, of the total chemical intermediates demand
Global Trade Dynamics
- Over the last two years, traditional trade patterns have been changing as there is a shift in demand dynamics across major markets. Export levels from the U.S. have increased, while Brazil is looking to restrict their exports in order to cater to local demand
- CPG participants in China and Europe are likely to leverage the inflow of material into these markets
Global Exports - Ethanol
Shift in Export Trade Patterns
- The U.S., which was traditionally a net importer of non-fuel ethanol (industrial), has been exporting more volumes in comparison to imports over the past two years
Shift in Import Trade Patterns
- Imports are on the rise in regions like China. In recent times, imports from Pakistan have increased as industrial ethanol prices are competitive in comparison to local Chinese prices. This is resulting in a shortage for European imports, who traditionally buy from Pakistan
- Pakistan is choosing China over Europe as it is logistically better and has lower export costs due the free trade agreements
