The Chinese poultry industry is a major consumer of maize (corn) and reports on that industry provide an insight on the Chinese maize production, which is the sole source of the feedstock of that country’s furfural production.
In August 2013, there were heavy floods in one of the major production territories. Although the total impact of this years floods have not been fully understood, we know that some furfural companies have lost their stockpiles and others will struggle to procure sufficient cobs for the 2013/14 production.
The operating rate of furfural companies in China decreased sharply from 30 June to 20 July this year, due to the heavy rain in this period .
Previously there had been droughts, now these floods will cause a furfural shortage and a spike in the furfural prices. At the beginning of 4Q13, we have already observed a US$200/t increase since 2Q13. In the absence of any significant new furfural production outside China, domestic Chinese issues will therefore continue to ‘rule the roost’ of the global furfural industry.
For our clients, we updated our article on how the pricing of furfural works in China. For owners of biomass we offer technology and market access, creating investment opportunities in the cleantech space.