global ethanol outlook 2015 from green pool commodities
TRANSCRIPT
Green Pool Commodity Specialists
• Relatively new company started late 2011
• Based in Brisbane, Australia
• 4 market analysts (+ 1 in Europe ), 1 agronomist, support
• Focus on global sugar, ethanol, biofuel feed-stocks
• Client base: 90% international/10% Australian clients are
producers, traders, processors, manufacturers, banks, funds
• Output price reports, analysis, consultancy, statistics re
market, balances, trade-flows etc
• Previously analytical division of Kingsman SA long term
experience in sugar/biofuels/commodities/consultancy
Global Ethanol Balance Key Factors
• Market transitioning from surplus (2014) to deficit (2015)
• US output sharply rising & it remains the dominant exporter
• EU production supported but decline in demand may ease
•
support the market
• Asia remains the key deficit region with increasing
competition to supply markets
Global Outlook
2013 2014 % 2015 %
Production 106,100 111,334 +4.9% 112,444 +1.0%
Consumption 104,380 109,379 +4.8% 113,663 +3.9%
Fuel 84,474 89,186 +5.6% 93,433 +4.8%
Non-fuel 19,906 20,193 +1.4% 20,230 +0.2%
Surplus - Deficit 1,720 1,955 1,219 -
Imports 11,964 10,584 -11.5% 11,421 +7.9%
Exports 12,228 11,301 -7.6% 11,147 -1.4%
Annual Global Ethanol Balances (mln L)
-
25
50
75
100
125
2013 2014 2015
Production Non-Fuel Fuel
Global: Ethanol Market Balance
bln L
2015 Quarterly Breakdown
-
10
20
30
40
Q1 2015 Q2 2015 Q3 2015 Q4 2015
Production Non-fuel Fuel
Global Ethanol Market Balancebln L
Fuel Non-fuel Import Export
22,257 22,077 5,165 2,913 2,870 - 4,943
29,034 23,480 4,848 2,905 2,785 827
31,879 23,629 4,712 2,746 2,572 3,711
29,472 23,867 5,533 2,741 2,704 108
112,641 93,053 20,257 11,304 10,932 - 297
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Total 2015
ProdnConsumption Trade
Stock ∆
Brazil demand grows but production steady
2013 2014 2015
Production 27,397 27,809 28,336
Consumption 22,613 26,185 29,300
Fuel 20,441 24,030 27,188
Non-fuel 2,172 2,155 2,112
Trade
Import 189 451 730
Export 3,100 1,500 1,003 -
5
10
15
20
25
30
35
2013 2014 2015
Production Non-fuel Fuel
Brazil: Ethanol Market Balance
bln L
-5%
0%
5%
10%
15%
20%
25%
0
5
10
15
20
25
30
05 06 07 08 09 10 11 12 13 14
Brazil: Gasoline Market
Tot. Gas/Eth Sales Ann'l Growth (LHS)
mln bpe annual growth
1. Overall recovery in fuel market growth
-
20
40
60
80
100
120
140
0%
10%
20%
30%
40%
50%
60%
Jan
00
Jun
01
No
v 0
2
Ap
r 0
4
Se
p 0
5
Fe
b 0
7
Jul 0
8
De
c 0
9
Ma
y 1
1
Oc
t 12
Ma
r 14
Minas Gerais Vol (RHS)
Minas Gerais
Sao Paulo
Minas Gerais: Hydrous Sales
% Tot. Gasoline Mkt mln L
2. ICMS Tax Changes in Minas Gerais
3. Increase in Anhydrous Blend Rate from 25% to 27%
from Feb/Mar 15
4. Re-introduction of CIDE Tax on Gasoline C
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
11 12 13 14 15 16
at 27% at 25%
bln L
Brazil: Mthly Anhdyrous Demand
0%
10%
20%
30%
40%
50%
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Volume (LHS)Market Share
bln L
Brazil: Mthly Hydrous Demand
Exports fade and imports grow
-1,250
-1,000
-750
-500
-250
0
250
500
750
1,000
1,250-1250
-1000
-750
-500
-250
0
250
500
750
1000
1250
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
Imports Exports
Brazil: Quarterly Ethanol Trade
mln Lmln L
0
100
200
300
400
500
Jan
10A
pr 10
Jul 10
Oc
t 10Ja
n 11
Ap
r 11Ju
l 11O
ct 11
Jan
12A
pr 12
Jul 12
Oc
t 12Ja
n 13
Ap
r 13Ju
l 13O
ct 13
Jan
14A
pr 14
Jul 14
Oc
t 14
Th
ou
san
ds
mln L
Brazilian Ethanol Exports
Other EuropeMid EastEU 27E AsiaS AsiaCBINth America
USA demand grows but production steady
2013 2014 2015
Production 51,868 55,762 55,835
Consumption 51,441 51,747 52,238
Fuel 49,866 50,148 50,590
Non-fuel 1,575 1,599 1,648
Trade
Import 1,514 294 590
Export 2,703 3,549 3,943 -
10
20
30
40
50
60
70
2013 2014 2015
Production Non-fuel Fuel
US: Ethanol Market Balance
bln L
Output is Margin Driven
1. Corn Input Prices Remain Near Historical Lows
2. Ethanol Returns at 9½ year Lows
3. Margins are no longer conducive to further growth
4. Stocks only now starting to build
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.02
00
7
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
$/buPrompt CBOT Corn Futures
1.00
2.00
3.00
4.00
5.00
Jan
14
Fe
b 1
4
Ma
r 14
Ap
r 14
Ma
y 1
4
Jun
14
Jul 1
4
Au
g 1
4
Se
p 1
4
Oc
t 14
No
v 1
4
De
c 1
4
Jan
15
Argo ITT NYH Barges
Houston Rail Los Angeles
US National Ethanol Prices$/gal
US National Ethanol Prices$/gal
750
800
850
900
950
1,000
1,050
-0.50
0.00
0.50
1.00
1.50
2.00
Jan
11A
pr 11
Jul 11
Oc
t 11Ja
n 12
Ap
r 12Ju
l 12O
ct 12
Jan
13A
pr 13
Jul 13
Oc
t 13Ja
n 14
Ap
r 14Ju
l 14O
ct 14
Jan
15
Ethanol Profit Margins vs Prod'n
Margin Over Tot. Cost
Weekly Prod'n (RHS)
$/gal '000 bbl
12
14
16
18
20
22
24
26
700
750
800
850
900
950
1,000
1,050
Jan
12
Ma
y 1
2
Se
p 1
2
Jan
13
Ma
y 1
3
Se
p 1
3
Jan
14
Ma
y 1
4
Se
p 1
4
Jan
15
mln bbl
US Weekly Ethanol S & D vs Stocks
Stocks (RHS) Blender Inputs
Production
'000 bpd
Exports grow and imports fade
-1,250
-1,000
-750
-500
-250
0
250
500
750
1,000
1,250-1250
-1000
-750
-500
-250
0
250
500
750
1000
1250
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
Imports Exports
US: Quarterly Ethanol Trade
mln L
-
200
400
600
800
Jan
09
Jul 0
9
Jan
10
Jul 10
Jan
11
Jul 11
Jan
12
Jul 12
Jan
13
Jul 13
Jan
14
Jul 14
Nth America
Mid East
Europe
Asia
Lat America
Africa
US Ethanol Exports by Destination
mln L
EU-28 a shrinking market
2013 2014 2015
Production 6,616 7,069 7,301
Consumption 7,941 7,787 7,854
Fuel 5,408 5,257 5,256
Non-fuel 2,533 2,530 2,597
Trade
Import 5,457 4,795 4,648
Export 3,879 4,079 4,091 -
1
2
3
4
5
6
7
8
9
2013 2014 2015
Production Non-fuel Fuel
EU 28: Ethanol Market Balancebln L
Production Pressure as Demand Declines
1. Grain Prices Rebounding 2. Crush Margins Under
Pressure
3. Gasoline Demand is in Decline
4. Discretionary Demand Under Pressure
-300
-200
-100
0
100
200
300
400
450
500
550
600
650
700
No
v 12
Fe
b 13
Ma
y 13
Au
g 13
No
v 13
Fe
b 14
Ma
y 14
Au
g 14
No
v 14
/mt
EU: T2 Price & Crush Margins
Crush Margin - CornCrush Margin - WheatFOB T2 (LHS)
/m3
125
150
175
200
225
250
275
Jan
13
Ma
r 13
Ma
y 1
3
Jul 1
3
Se
p 1
3
No
v 1
3
Jan
14
Ma
r 14
Ma
y 1
4
Jul 1
4
Se
p 1
4
No
v 1
4
Jan
15
Maize Wheat
/mt
Prompt EU Wheat and Maize Prices
0
2
4
6
8
10
Jan
10
Jul 1
0
Jan
11
Jul 1
1
Jan
12
Jul 1
2
Jan
13
Jul 1
3
Jan
14
Jul 1
4
UK
Sweden
Spain
Portugal
Norway
Netherlands
Latvia
Italy
Ireland
Germany
France
Denmark
#REF!
Austria
Gasoline Use in Selected EU Countries
bln L
-
5
10
15
20
25
30
8
10
12
14
16
18
Jan
12
Ma
r 12
Ma
y 1
2Ju
l 12
Se
p 1
2N
ov
12
Jan
13
Ma
r 13
Ma
y 1
3Ju
l 13
Se
p 1
3N
ov
13
Jan
14
Ma
r 14
Ma
y 1
4Ju
l 14
Se
p 1
4N
ov
14
Sweden - E85 & Bensin Prices
E85 use Bensin 95 E85
SEK/L mln L
Exports grow and imports fade
-
25
50
75
100
125
10 11 12 13 14
All Others
Other GSP Plus
Bolivia
Peru
Guatemala
Pakistan
GSP
EBA
EU Imports by Duty Access
mln L
0
10
20
30
40
50
60
70
80
Jan
12
Ma
r 12
Ma
y 1
2Ju
l 12
Se
p 1
2N
ov
12
Jan
13
Ma
r 13
Ma
y 1
3Ju
l 13
Se
p 1
3N
ov
13
Jan
14
Ma
r 14
Ma
y 1
4Ju
l 14
Se
p 1
4
Africa
Asia
Middle East
North America
Latin America
Other Europe
Other
EU28: Exports by Regionmln L
Asia Pacific the deficit grows
2013 2014 2015
Production 13,744 13,879 13,950
Consumption 14,399 15,133 15,497
Fuel 4,596 5,220 5,599
Non-fuel 9,804 9,913 9,898
Trade
Import 1,817 2,060 2,478
Export 1,111 940 905 0
5
10
15
20
2013 2014 2015
Production Non-fuel Fuel
Asia Pacific: Ethanol Market Balance
bln L
Pakistan trade under pressure
-
10
20
30
40
50
60
70
80
Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14
Other EuropeAfricaEast Asia & OceaniaEUMiddle East
Pakistan Ethanol Exports mln L
1.50
1.75
2.00
2.25
2.50
2.75
3.00
80
85
90
95
100
105
110
Jan
12
Ap
r12
Jul1
2
Oc
t12
Jan
13
Ap
r13
Jul1
3
Oc
t13
Jan
14
Ap
r14
Jul1
4
Oc
t14
Jan
15
USD/BRL
Pakistan Rupee and Brazilian Real
USD/PKR USD/BRL
USD/PKR
Japan - ethanol demand rising
2012
578 mln L +2.7%
2013 2014*
591 mln L +1.9%
576 mln L +10.1% (Jan Nov)
Brazil
291
50%
USA
30
5%
Pakistan
133
23%
Other Asia
123
21%
Brazil
342
58%
USA
10
2%
Pakistan
126
21%
Other Asia
112
19%
Brazil
408
71%
USA
38
6%
Pakistan
91
16%
Other Asia
33
6%
Other
6
1%
Korean origins are shifting
2012
284 mln L +5.7%
2013 2014
265 mln L -6.7%
373 mln L +14.7%
Brazil
68
24%
USA
26
9%
Pakistan
89
31%
Other
Asia
87
31%
Other
14
5%Brazil
68
26%
USA
5
2%
Pakistan
99
37%
Other
Asia
77
29%
Other
16
6% Brazil
91
30%
USA
69
23%
Pakistan
56
18%
Other
Asia
52
17%
Other
36
12%
India huge market potential
-
1
2
3
4
2013 2014 2015
Production Non-fuel Fuel
India: Ethanol Market Balancebln L
2013 2014 2015
Production 3,042 3,058 2,927
Consumption 2,843 3,091 3,260
Fuel 195 422 597
Non-fuel 2,648 2,669 2,663
Trade
Import 34 101 515
Export 233 152 171
0%
1%
2%
3%
0
100
200
300
400
500
600
700
06 07 08 09 10 11 12 13 14E 15
India: Fuel Ethanol Consumption
Biofuel Consumption Implied Blending Rate
mln litres
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