US ethanol producer Poet idled three plants and delayed the opening of a fourth to help balance production with demand that is plunging amid efforts to control the spread of Covid-19.
The closures and delayed start-up are expected to shrink corn demand by 110mn bushels/yr and reduce ethanol production by 330mn USG/yr, Poet said today.
The idled plants include Poet's largest, located in Chancellor, South Dakota, which can produce 100mn USG/yr of ethanol and 56 metric tonnes/yr of dried distiller grains. The company also is idling its Ashton and Coon Rapids plants in Iowa, which can produce 56mn USG/yr and 54mn USG/yr of ethanol, respectively. The delayed start-up is at a new plant in Shelbyville, Indiana.
Poet, which previously reeled in production at other plants, is trying to adjust ethanol output to reflect sharply reduced mobility in the US amid restrictive government measures aimed at limiting the spread of the coronavirus. Demand for road fuels and the biofuels that are blended into them have been deeply impacted by these actions, with spot prices for ethanol in New York Harbor and Chicago setting record lows in the last two weeks. The pandemic may be cutting US fuel use by as much as 55pc, Poet said.
"Unfortunately, plummeting fuel demand amid the coronavirus pandemic has overwhelmed markets already suffering from continued trade barriers, a foreign price war over oil and regulatory uncertainty here at home," Poet chief executive Jeff Broin said.
If current conditions persist, domestic ethanol demand could fall by up to 8bn USG/yr, with corn demand down by 2.7bn bushels/yr, the company said.
Poet operates 28 plants across seven states and produces 2bn USG/yr of ethanol when running at full capacity.
