April 15, 2015 / 8:34 PM / 5 years ago

U.S. ethanol plants idle earlier for maintenance due to weak margins

NEW YORK, April 15 (Reuters) - U.S. ethanol production plants have idled for seasonal maintenance earlier this year than in 2014, as margins languish near break-even levels and inventories hover near 2012 highs, causing a year-over-year slowdown in output, according to industry sources.

Many producers of corn-based biofuels have shuttered plants for routine maintenance earlier this year amid declining profits and sluggish demand. Weekly U.S. government data on Wednesday showed total U.S. production averaged 924,000 barrels per day last week.

That marked a fourth straight week of declines and was lower than the 939,000 barrels a day pumped during the same period in 2014.

“Some facilities may have been a little more anxious to get that maintenance (done) this year than in past years because of the margin situation,” said Geoff Cooper, senior vice president with the Renewable Fuels Association, which represents biofuels producers.

Profit margins for ethanol producers in the region are down some 70 percent from a year ago, hovering at or below break-even levels. Producers are more likely to delay maintenance when margins are strong.

Cooper said that many mills have shut down for maintenance a week or so earlier than they did last year, when margins were at record levels.

Output in the Midwest cornbelt, the hub of U.S. ethanol production, fell for a fourth straight week to 842,000 barrels a day, about 3 percent lower than the same period last year.

Sources could not say when the maintenance would conclude.

“April has been a big month for shutdowns,” said a U.S. broker. “A lot more went down at the same time than normal.” (Reporting by Chris Prentice; Editing by Diane Craft)

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