US fuel ethanol producer Valero shuts two plants, declares FM

HOUSTON (ICIS)–US fuel ethanol producer and refiner Valero is closing two of its ethanol plants and declaring force majeure on shipments of dried distillers grains or corn purchases, according to sources.

The force majeure is due to lack of storage availability for corn or ethanol as gasoline demand wanes and storage remains limited due to excess supply.

The company is temporarily closing its plants in Albion, Nebraska, and Albert City, Iowa, as the coronavirus is weighing on gasoline demand.

Supply of fuel ethanol remains ample while some producers are switching to industrial ethanol production as demand from that sector continues to climb.

The state of the summer driving season remains in question, which is hampering demand. Fuel ethanol’s peak demand season is the summer.

Fuel ethanol demand is almost halved, according to sources, as 45% of fuel demand is currently on stay at home orders in the US and the orders continue to climb.

US ethanol producers are starting to reduce production of fuel ethanol and some are shifting their focus to industrial production as the coronavirus continues to pressure fuel markets and increasing the need for sanitiser production.

The company was not immediately available for comment.