Trade Resources Industry Views Multiple Ethanol Production Facilities in The US Midwest Will Undergo Turnarounds

Multiple Ethanol Production Facilities in The US Midwest Will Undergo Turnarounds

Despite ethanol prices at their highest levels in nearly eight years, multiple ethanol production facilities in the US Midwest will undergo spring maintenance turnarounds in the coming weeks, sources said Tuesday.

Flint Hills Resources will not accept corn at its 90 million gal/year facility in Iowa Falls, Iowa, from March 31 to April 11 for a spring turnaround, the company said on its website.

In addition, Plymouth Energy will not accept corn at its 50 million gal/year facility in Merrill, Iowa, for at least two days and possibly more, beginning April 1, according to the company's website.

With the significant demand dip expected, corn futures were down 3.75 cents Tuesday to $3.8625/bushel, cooling from Monday's settle of $3.90/bushel, the highest settle for a front-month contract since September 6, when it settled at $3.9150/bushel.

One ethanol trader said he expects the turnaround season -- generally, throughout April -- to be historically light, given current margins.

"Producers are well aware of the cash flow right now, so they'll be quick with it," the trader said, regarding maintenance and annual inspections.

The estimated production margin for a typical US Midwest dry-mill ethanol plant for the week ended March 21 soared 52.41 cents, or 49.81%, to a Platts record of $1.5763/gal, a review of data from the US Department of Agriculture and Platts showed.

Since hitting a six-month low five weeks ago, soaring ethanol and byproduct prices have boosted margins significantly. The margin was calculated at its highest level since Platts began tracking the data in September 2010.

The Platts Chicago Argo ethanol assessment Monday soared to its highest level in nearly eight years amid continued severe strains on supply.

Argo ethanol was assessed 19.85 cents higher at $3.4385/gal, the highest level since July 5, 2006, when it was at $3.9050/gal. At that time, similar supply concerns rocked prices as ethanol struggled out of the gate in the opening months of taking over for MTBE as the nationwide gasoline additive.

Source: http://news.chemnet.com/Chemical-News/detail-2277266.html
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Amid Soaring Prices, US Ethanol Plants Approach Spring Turnarounds
Topics: Chemicals