Two ethanol plants halt construction as lower ethanol prices hit hard
Two US firms suspended construction on new ethanol plants in the Midwest. Glacial Lakes Energy’s plant in Meckling, SD and Chippewa Valley’s 40 Mgy plant in Benson, MN received the axe. Both companies said that the fall in ethanol prices and increase in construction costs were the cause of the decision.
Chippewa Valley added that it saw excess ethanol capacity coming online. Glacial Lakes said it would continue construction process on its 100 Mgy Mina, SD plant.
Yesterday, the Alchem ethanol plant in Grafton, ND announced a shutdown due to low ethanol prices. Alchem makes about 10.5 million gallons of ethanol a year and 33,00 tons of livestock feed, using about 3.8 million bushels of corn. Abenogoa in Spain recently stopped production at its largest ethanol refinery owing to worldwide prices, and numerous plants have had slowdowns or stops in their financing efforts.
Last week, an article in the Wall Street Journal said financing for new ethanol plants is increasingly difficult, with cancellations and delays becoming a norm, while a partner at Baker & McKenzie described some plants as “under death watch”
