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UPDATE 1-Green Plains says ethanol output has slowed amid tight margins
February 5, 2015 / 5:18 PM / 3 years ago

UPDATE 1-Green Plains says ethanol output has slowed amid tight margins

(Adds details throughout, market reaction)

NEW YORK, Feb 5 (Reuters) - Green Plains Inc said on Thursday the ethanol maker has slowed production “slightly” in a tight margin environment, forecasting improved margins heading into the second quarter of 2015.

U.S. government data showed the first “glimpse” of a slowdown in production across the industry this week, an executive said on a conference call to discuss fourth-quarter earnings.

That slowdown may be greater than what has so far been seen in government data and will lead to a draw-down in inventories as U.S. and export demand remains robust, said Todd Becker, the company’s president and chief executive officer.

U.S. ethanol stocks have risen to the highest levels since mid-2012.

The company has been facing squeezed margins in the first quarter of the year, but sees improvements going forward as blenders work through those stocks amid good demand both in the United States and abroad.

“We have robust inquiries for export products on a daily basis,” Becker said, forecasting better margins in the next quarter.

Some fuel blenders dialed back their ethanol blending in December, the company said.

But with ethanol prices trading at a larger discount to other fuels heading forward, the company expects margins to improve.

The company’s stock jumped on Thursday after Green Plains reported earnings on Wednesday. Shares were up $2.63, nearly 11 percent, at $27.18 at midday. (Reporting by Chris Prentice; Editing by Chizu Nomiyama and Gunna Dickson)

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