Sky-high U.S. natural gas prices have prompted some Midwestern ethanol producers to reduce processing in the last week, hoping instead to sell off some of their natural gas to take advantage of current high spot prices caused by the spike in cold weather, industry sources said.
Reuters reports that Refinitiv Eikon data shows ethanol margins in the Corn Belt have dropped sharply due to the frigid weather, falling to negative-$3.92/gallon, lowest since at least 2010.
Natural gas prices have soared because of power needs, hitting their highest levels in years due to the cold snap.
One ethanol producer reduced his company’s run rate by more than 25% last week to sell natural gas that he earlier had bought at a contracted price.
