Diesel Shortage Storm Offering Chances to Biodiesel Producers

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Industrial Biotechnologies China News focuses on biofuels, bio-products, bio-based chemicals, bio-materials and industrial biotechnology applications, offers latest investment hotspots, new technology & product, company & market dynamics, and government regulations, aiming to facilitate your insight into China's industrial biotechnology.

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Diesel Shortage Storm Offering Chances to Biodiesel Producers

  1. 1. www.cnchemicals.comDiesel-shortage Storm Offering Chances to Biodiesel ProducersStatistics in early November 2010, from China General Chamber of Commerce, shows thatover 2,000 private-owned gas stations shut down due to seriousshortage of diesel supply in most areas of southern China, andsome developed provinces like Guangdong, Jiangsu and Zhejiangare the harder-hit areas. Until mid-November, the shortagesituation is still haunting around these areas and tending tospread into other large cities, like Beijing, Shanghai, Chongqing,etc.According to Industrial Biotechnology China News published byCCM International Ltd., the shortage of diesel may be a deadlytumor to most private gas stations, but it can also be a good chance to make a fortune for thediesel producers, especially the bio-diesel producers.Zhejiang Eastriver Energy S&T Co. Ltd. (Zhejiang Eastriver), a bio-diesel producer in ZhejiangProvince, disclosed that the average daily supply of bio-diesel of the company had risen up to120-200 tonnes from 70-80 tonnes lately after the outbreak of diesel shortage. They believedthat the shortage pressure of diesel could be eased to some degree by the bio-diesel, and themixed diesel, with a bio-diesel addition-ratio of 20% in the conventional 0# diesel, couldalmost equal the original one without readapting to the engine structure. Besides ZhejiangEastriver, many other domestic producers of bio-diesel also expressed that they are badly inneed of bio-diesel under the shortage circumstances lately.Before the shortage of diesel, the domestic bio-diesel industry has been developing hard withserious overcapacity. One reason is that the bio-diesel is not allowed to be sold like otherconventional oils in the state-owned gas stations accounting for over half of the total domesticgas stations, which is the main obstacle preventing bio-diesel accessing to the market.Moreover, the fundamental reason lies in the price competitiveness of conventional diesel overbio-diesel, which is caused by high production cost of bio-diesel. At present, most domesticbio-diesel producers use the drainage oil as raw material, and the price of which has increasedtwice compared with three years ago, leaving slim or even negative profit margin for thebio-diesel producers if they sell at the same price as that of the conventional diesel. Therefore,seeking the “affordable” raw material is the top priority for the bio-diesel producers in China atthe moment, which may be also the only way out for the whole industry.Despite the current seemingly glorious prospects for bio-diesel, it can not help wondering:what is the outlet of bio-diesel again if the diesel shortage fades away in the near future?The B5 standard issued on September 26th this year allows the domestic bio-diesel to officiallyenter into the regular distribution channels next February, but, as mentioned above, how canNeed more information or to purchase this report, please contact CCM at econtact@cnchemicals.com or on +86 20 37616606
  2. 2. www.cnchemicals.comthe bio-diesel capture the market at the same time if its raw material price keeps so high? Afterthe shortage storm, would the bio-diesel business have to meet challenges again?CCM’s Industrial Biotechnologies China News athttp://www.cnchemicals.com/Newsletter/IndustrialBiotechnologyNews.shtmlAbout Industrial Biotechnology China NewsIndustrial Biotechnologies China News focuses on biofuels, bio-products, bio-based chemicals,bio-materials and industrial biotechnology applications, offers latest investment hotspots, new technology& product, company & market dynamics, and government regulations, aiming to facilitate your insight intoChinas industrial biotechnology.About CCMCCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of morethan 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports,Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary productValoTracer.Please visit http://www.cnchemicals.com for more information or contact econtact@cnchemicals.comCCM International, Ltd.Guangzhou CCM Information Science & Technology Co, Ltd.17th Floor, Huihua Commercial & Trade Mansion No, 80 Xianlie Zhong Road, Guangzhou 510070, ChinaNeed more information or to purchase this report, please contact CCM at econtact@cnchemicals.com or on +86 20 37616606

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