US Ethanol Face Delays on Panama Canal
Ethanol shipped from the US Gulf Coast to Asia could be delayed by 10-12 days on new shipping regulations at the Panama Canal, a market participant said.
The February 15 implementation of a new freshwater surcharge at the Panama Canal due to low water levels at the Gatun Lake is starting to see some shipping delays.
Earlier, the Panama Canal Authority, or PCA, adjusted the number of daily reservation slots available for ships to 27, with effect February 15, replicating the total offered during lane outages. PCA also now requires each ship to pay its booking fee in full no later than 48 hours, depending on the booking period.
“A delay of 10 to 12 days could easily add up,” said the market participant, who added that there is a possibility of higher costs been passed onto the buyers.
Another source saw no effect on ethanol prices, saying demand for imported ethanol was weak in Asia anyway.
Meanwhile, a buyer in the Philippines reported receiving February shipment and was awaiting March shipment. “So far, I had not been informed of any delay in shipment.”
Philippines domestic ethanol prices headed higher in H1 February, up 1.18% on a half-monthly basis to Pesos 60.99/l ($1,200/cu m), latest data released by the country’s Sugar Regulatory Administration showed Friday.
In the first half of February, the average imported fuel ethanol price was at $465.80/cu m CIF Philippines, S&P Global Platts data showed, which remained at less than half of locally produced ethanol prices.
Demand for imported ethanol was reported this week in the Philippines for the third quarter, with the buyer pondering whether to take for the fourth quarter as a hedge against price shift.
The majority of US ethanol is imported from USGC as the bulk of ethanol plants are around the area.
Separately, on March 2, the PCA issued a shipping circular that will see draught restrictions for neo-Panamax ships from March 30 due to low water levels.
Effective March 30, the Maximum Authorized Draught for ships transiting the neo-Panamax locks would be at 13.87 m (45.5 feet) Tropical Fresh Water, or TFW, based on the present and projected level of Gatun Lake for the upcoming weeks. Ships with drafts over 13.87 m (45.5 feet) TFW may be allowed to transit, depending on the actual level of Gatun Lake at the time of transit.
According to ethanol sources, this ruling is unlikely to affect ethanol flows into Asia as their ships meet the draught requirement.