US  West  Coast  ethanol  markets have spiked in recent days, widening their premium to the 

Chicago paper market as tightness in rail markets has left less product available, sources sai

d Thursday. 

"People stopped sending product out there because people were bringing boats in," said one 

source,  referring to ethanol imports from Brazil arriving in California. "Nobody wanted to have 

product out there and staged because they'd get crushed." 

The  arbitrage  to  import ethanol from Brazil has been closed for most of the year. But recent 

weeks have seen imports starting to arrive in California. With a shipment easily accounting for 

20,000 cu m, market participants did not want to take long positions ahead of the cargoes. 

"People would rather buy hand to mouth and pay a premium than buy a unit train and have to 

handle 80-90 cars," said the source. 

Another source said that the Pacific Northwest market has moved to a premium over Northern 

California, the inverse of the usual relationship between the two markets. 

Northern  California  rail cars traded for $1.76/gal Thursday while Washington cars traded for 

$1.77/gal and Oregon for $1.78/gal. 

"Some  buyers  were  trying to  be cute and purchased stuff in the spot market thinking they'd 

get a better deal but it's backfired," said the second source. 

The West Coast markets typically hold around a 14-cent premium to the front-month Chicago 

ethanol  swap.  But  current  tightness  has  seen  that  climb as high as 25 cents, the second 

source said. 

S&P  Global  Platts  does  not  assess  the  Pacific  Northwest  market, but assessed Northern 

California rail cars with a 95.02 carbon intensity (CI) at $1.6675/gal Thursday. 

California's  Low  Carbon  Fuel  Standard assigns CI scores to ethanol producers.The scores 

then affect  the  value  of  the  molecule  of  ethanol being traded. Platts normalizes California 

trades,   commonly  79.9   or  sub - 75  CI,  to the  2017  gasoline  standard  of  95.02  for  its 

assessments. 

Platts assessed the front-month Chicago ethanol swap at $1.54/gal for a 12.75-cent premium 

for 95.02 CI California ethanol.