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Industrial-use exports support US ethanol amid COVID-19

Markets were hit by COVID-19
Markets were hit by COVID-19
Ethanol destined for industrial-use applications helped stabilise overall US ethanol exports in April and May amid a bleak period for fuel demand globally.
The world’s fuel markets were dramatically disrupted in early 2020 as governments instituted movement restrictions and released social distancing guidelines to address the COVID-19 pandemic. Industrial end-use markets – including chemical, solvent and consumer products – were impacted to a lesser extent as the pandemic triggered substantial uptick for sanitising and disinfecting products that also use ethanol as an ingredient.
As a result, industrial ethanol played a significant role in stabilising the overall US ethanol export mix. At the same time, the US Grains Council (USGC) has been working with its global staff to determine the best opportunities to assist the world’s expanding needs for industrial ethanol alongside a robust fuel ethanol programme.
“As we work to expand the global use of ethanol, we are creating awareness of how the environmental, human health and economic benefits of the product apply to uses outside of the fuel market,” said Lucas Szabo, USGC manager of global ethanol market development. “We are working to foster the development of end-use applications for industrial ethanol and support current uses like sanitisers.”
Industrial-use markets typically account for 25% of total U.S. ethanol exports, bought for uses like windshield wiper fluid in South Korea and the European Union or bioplastics in India. As fuel demand began to decline in March, industrial ethanol exports started to represent a larger proportion of the export mix and help support overall US ethanol exports.
US ethanol exports for industrial uses equated to approximately 50 percent of total exports in April and May, at roughly 44 million gallons (15.7 million bushels in corn equivalent) and 33 million gallons (11.7 million bushels in corn equivalent), respectively.
The remaining half of exports continued to supply fuel markets. India, Nigeria and the Persian Gulf remained strong purchasers of US ethanol for industrial use, while increases in exports to South Korea and Mexico were notable.
“The importance of industrial ethanol has been highlighted in recent months,” Szabo said. “These markets play a key role in supporting global environmental and human health initiatives in a variety of sectors beyond transportation fuel.”
Markets were hit by COVID-19