Ethanol Market - Drying Technology Inc. Introduced New Approach to Rationalize Ethyl Alcohol Production

John Robinson, president of Texas-based Drying Technology Inc. is convinced that the U.S. ethanol market has been losing up to 100 million USD per year due to poorly developed coproduct moisture control. Drying Technology Inc. offers a solution; a system that they believe will save this industry billions of dollars in the long run.

Robinson defines "overdrying" as a serious flaw of the industry. The Company's system lies in deploying an inside-the-dryer moisture sensor that minimizes "dead time" and final moisture control variation by 30% or more. Another sensor serves to distinguish dryer load swings. Drying Technology Inc. also applies a precise mathematical approach for continuous recalculations of the set point essential for keeping optimal moisture control following evaporative load alterations.

As a result, moisture control variation is reduced by almost 50%. This allows producers to leave more water in their product, while at the same time knowing that it is not exceeding the upper specification limit.

Because most ethyl alcohol facilities have poor moisture control, they typically keep their target moisture below specification, which is often less than 12%. Drying Technology Inc. reduces the moisture control curve, rationalizing the process. It translates into a 1 USD/tonne net increase in income, saving a 110 million gallon plant at least 350 thousand USD annually.

Overall, the U.S. ethyl alcohol industry continues to dominate in the global ethyl alcohol trade. In 2014, the U.S. exported 1,868 thousand tonnes of ethyl alcohol totaling 2,111 million USD, 31% over the previous year. Its primary trading partner was Canada, where it supplied 41.2% of its total ethyl alcohol exports in value terms, accounting for around 100% of Canada's total imports.

From 2010 to 2014, the U.S. was a net exporter of ethyl alcohol. Over this period, exports consistently exceeded imports in value terms. However, in physical terms, the difference was less pronounced.

Brazil and France were among the other main global suppliers of ethyl alcohol in 2014. However, the fastest growing exporters from 2007 to 2014 were the Netherlands (+40.3% per year) and Hungary (+28.5% per year). Still, it was the U.S. that significantly strengthened its position in the global export structure.

The U.S.'s top 5 trading partners in 2014 were Canada, Brazil, the United Arab Emirates, Philippines and the Republic of Korea, with a combined 73.8% share of the U.S.'s ethyl alcohol exports. The share of Brazil increased significantly (+12.4 percentage points), while the share of Canada fell sharply (-35.0 percentage points).

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Source: World: Ethyl Alcohol - Market Report. Analysis and Forecast to 2020