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US ethanol producers are feeling the pain as margins on the corn-based fuel slumped this week to an eight-year low for this time of year, weighed by concerns over lower fuel demand from the coronavirus and the recent collapse in oil prices, reports Reuters.
The coronavirus outbreak is sapping demand for fuel as countries restrict travel and local governments try to prevent the spread of the outbreak.
Because the US requires ethanol to be blended into the nation’s fuel pool, gasoline consumption plays a role in demand for the corn-based fuel.
With falling gasoline prices and lower expected gasoline demand, some market participants said it’s only a matter of time before ethanol plants decide to cut rates or shut.
