Shandong MTBE Market Underperformed from May 25

According to SCI’s statistics, the Mtbe prices in Shandong kept rising from March and reached RMB 6,650/mt in H2 March. However, the MTBE market obviously weakened from May 25, due to the great increase in the MTBE supply.

On the one hand, the international crude oil prices greatly increased. Therein, the Brent crude oil futures prices were close to $80/bbl. The international crude oil prices hovered at highs, giving strong support to the market sentiment. Therefore, the sales of MTBE at producers performed well. On the other hand, the MTBE units in Shandong took overhauls in succession from the end of February, and the lowest merchantable MTBE volume in Shandong was lower than 7kt, down 36% from the highest level. Thus, the Mtbe prices in Shandong gradually grew.

However, the MTBE market weakened gradually from May 24. On the one hand, the MTBE prices in Shandong skyrocketed, thus downstream users showed resistance to the high-priced MTBE resources. On the other hand, the international crude oil prices started to decline from May 25, weighing on the market sentiment. Therefore, most market participants held wait-and-see sentiment towards the MTBE market.

Currently, the sales of gasoline at independent refineries are average, and most blenders purchase feedstock on a need-to basis due to the relatively high inventory pressure. But the MTBE supply in Shandong obviously rises, thus the MTBE prices in Shandong drops to some extent. Besides, the profits of the MTBE units in Shandong perform well. Hereinto, the average theoretical profit of dehydrogenation MTBE unit reaches RMB 500/mt. Therefore, most MTBE producers in Shandong choose to cut prices to promote sales.