Alto Ingredients Inc (ALTO)

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Things are not looking too good for the Ethanol industry:

U.S. ethanol industry at breaking point, Green Plains CEO says
Jul. 29, 2019

https://seekingalpha.com/news/3482753-u-s-ethanol-industry-breaking-point-green-plains-ceo-says?dr=1#email_link

The U.S. ethanol industry is nearing a breaking point under the weight of the U.S.-China trade war and the surge in the number of small refineries exempted from U.S. biofuel laws, Green Plains (GPRE -2%) CEO Todd Becker tells Reuters.

The sustained downturn in margins finally will begin taking its toll as some producers run out of money: "Some plants will slow down, some will shut down, some will shut down forever," Becker says.

U.S. ethanol production in early June reached nearly 1.1M bbl/day, the highest seasonally on record, but margins to produce ethanol ETH-CB-REF are at the lowest seasonally since 2015, according to Refinitiv.

Becker says the industry has been undisciplined, continuing to ramp up production amid weak demand growth and growing supplies; GPRE has decided to cut production in the past, but this time it has the capital and operational plan to sustain weak or negative margins, the CEO says.

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