New York Harbor barges for ethanol reached their highest point in 2020 on June 23 as the Tri-state area emerges from its coronavirus-spurred lockdown.
S&P Global Platts assessed FOB New York Harbor barges for June delivery at $1.4650/gal, topping the previous 2020 high of $1.4625/gal reached on January 29. The assessment was the highest since reaching $1.4750/gal on December 31.
“Inventories keep drawing there and demand is coming back,” a source said of the market. New York City, which has been under heavy shelter-in-place restrictions to battle the pandemic, began its second phase of reopening on June 22.
Under phase two, outdoor dining at restaurants and bars is allowed, workers can return to offices at 50% capacity and various retails businesses are allowed to reopen.
New York ethanol prices have also been aided by falling stocks. As demand waned earlier in the year, producers drew down inventories. East Coast ethanol stocks have dropped to 6.923 million barrels from 8.551 million barrels at the end of February.
Premiums for those barges to paper have been rising sharply during the last week as New York began to ease its coronavirus restrictions. On June 15, June barges were assessed at a 14.25-cent premium to the July Chicago ethanol swap. On June 23, the premium rose to 23 cents, the highest level since reaching 29 cents on October 16.
The rally comes as Chicago Argo, the nation’s dominant ethanol trading hub, has seen prices fall during the last two sessions as liquidity dries up. An upcoming maintenance project on the Illinois River locks is expected to stop barge traffic into that terminal for several months.