MTBE Market Trends Show Weak Consolidation in China

August 22, News

According to the commodity market analysis system, from August 15 to 22, the price of MTBE fell from 5060 CNY/ton to 5020 CNY/ton, a decrease of 0.79% within the period, down 0.35% month-over-month, and down 18.37% year-over-year. The Chinese MTBE market showed a weak and volatile trend. Some large manufacturers have ended their export aggregation, leading to an increase in external sales of MTBE, with resources becoming more abundant. Due to weak crude oil prices and other negative factors, the terminal demand for gasoline was poor, and industry players purchased related gasoline components based on demand. MTBE manufacturers offered discounts to promote sales.

MTBE China Production Price Average Trend Chart:

Cost Perspective: On the crude oil front, international oil prices declined, primarily due to positive signals emerging from Russia-Ukraine peace talks, which suggest a potential easing of geopolitical tensions and, consequently, reduced support for oil prices. As of August 21, the settlement price for the October Brent crude oil futures contract was reported at $67.67 per barrel.

Demand Side, in the downstream gasoline sector, crude oil is showing weak fluctuations and the retail price cap for this round is expected to decrease. As the summer vacation period is coming to an end, the frequency of people traveling is beginning to decline. The demand for MTBE is being negatively affected by these factors.

Supply side: The start-up of Henan's MTBE manufacturer Haierxi and Huizhou Yuxin facility affected this week's production, with the facility utilization rate increasing. In the short term, favorable factors are influencing China's MTBE supply.

As of August 22, statistics on MTBE factory prices from selected production companies:

As of the close on August 21, the Asian MTBE market closed at $664.91–$666.91 per ton, up $10.46 from the previous trading day on an FOB Singapore basis. Meanwhile, the European MTBE market ended at $837.99–$838.49 per ton, a rise of $10.75 compared to the prior session, quoted on an FOB ARA basis. In the U.S., the MTBE market closed at $784.36–$784.71 per ton (equivalent to 221.47–221.57 cents per gallon), up $16.43 from the previous day on an FOB Gulf offshore price basis.

Market Forecast: Currently, some manufacturers still have exports supporting the market; however, as the summer season nears its end and gasoline demand begins to wane, MTBE analysts expect China's MTBE market to remain predominantly in a weak, consolidating trend.