Ethanol producers in the US complain about poor margins on their fuel made from corn. It is feared that less gasoline will be used and that less biofuel will be added to the gasoline, as the price of crude oil collapsed this week.
To date, at least 126,000 people worldwide have tested positive for the corona virus. The demand for gasoline collapses because governments all over the world restrict people's freedom of movement.
The US has committed its refineries to blending ethanol with gasoline made from corn. Falling gasoline prices and falling consumption could be responsible for the fact that the ethanol factories are less profitable and may even have to close. Half of the factories in the United States are already in the red.
Profit margins dropped yesterday to minus 6 cents per gallon, the lowest level since March 2012. The price of crude oil in the United States has already dropped 50% this year, as has the price of petrol. The 200 ethanol factories in the United States currently produce 1.04 million barrels of ethanol a day. Inventories in the United States are currently reported at 24.3 million barrels.
Last year, 10 US factories closed and 400 jobs were lost. The next wave of layoffs could start in July and August.
Source
HANSA Terminhandel
