August MTBE Market Trends in China

August 29 update

According to the commodity market analysis system, the MTBE market in China fluctuated and consolidated in August. From August 1st to 29th, the price of MTBE fell from 5,370 CNY/ton to 4,985 CNY/ton, with a price decrease of 1.04% during the period, and the maximum fluctuation was 2.64%. The price decreased by 19.43% year-on-year.

At the beginning of the month, the Chinese MTBE market showed a narrow range of adjustments. Some manufacturers were exporting to ports, and some had limited external releases, providing some support to the market. However, terminal demand for gasoline was weak, and local inspections were strict, leading to generally low purchasing enthusiasm for related gasoline components. MTBE manufacturers faced a cold response in their sales. With the continuous rise in crude oil prices, MTBE prices saw a slight rebound, but the increase was relatively limited.

In the early part of the month, the Chinese MTBE market showed a firm trend with prices slightly increasing. Large manufacturers such as Lihuayi exported goods for port aggregation, with no external sales currently, providing significant support to the market. At the same time, some large manufacturers focused primarily on fulfilling export orders, reducing the volume of goods available for the domestic market. Under this support, MTBE manufacturers maintained their prices and continued to sell.

In the middle of the month, after MTBE prices reached a temporary peak, market activity cooled somewhat as some industry players grew less eager to make purchases, leading to a slight price pullback. However, as the market’s adjustment narrowed, prices quickly stabilized once again.

In the late month, the Chinese MTBE market was weak and volatile. Some large domestic manufacturers ended their export consolidation, leading to an increase in MTBE external sales. As a result, resource supply gradually became more abundant. However, the terminal demand for gasoline was poor due to factors such as weak crude oil prices, which negatively impacted the market. Industry players purchased related gasoline components based on demand, and MTBE manufacturers offered discounts to promote sales.

MTBE China Production Price Average Trend Chart:

Cost Perspective: Since August, international crude oil prices have weakened, with the monthly average price declining for two consecutive months. Brent crude has remained consistently below the $70 mark, reflecting an overall slightly sluggish performance. In August, Brent’s price fluctuation range was between $65.63 and $69.67 per barrel. The primary negative factor driving the decline in oil prices during August was OPEC+’s unwavering stance on increasing production, which created a bearish market sentiment. Additionally, the U.S. has been actively promoting peace talks between Russia and Ukraine, leading to a noticeable easing of geopolitical tensions.

Demand side, in the downstream gasoline sector, as the summer vacation approaches its end, terminal demand for gasoline is gradually weakening. Purchases by operators are mostly based on immediate needs, and the market trading atmosphere is becoming more cautious. The demand for MTBE is negatively impacted by bearish factors.

Supply-wise, at the beginning of the month, Lihuayi's factory will not sell externally and plans to stop operations at the Dongming Qianhai plant. Mid-month, Huizhou Yuxin has plans to start its isomerization unit, while Shandong Yuhuang's dehydrogenation unit may have a shutdown plan. Heilongjiang Xinrui Chemical also has plans for a shutdown, which will lead to a decrease in resource supply. Overall, the MTBE supply in China is influenced by negative factors.

As of August 29, statistics on MTBE factory prices from selected production companies:

As of the close on August 28, the Asian MTBE market closed at $657.79–$659.79 per ton, up $1.57 from the previous trading day on an FOB Singapore basis. Meanwhile, the European MTBE market edged up $12 per ton compared to the prior session, with prices settling at $865.99–$866.49 per ton on an FOB ARA basis. In the U.S., the MTBE market closed higher by $7.79 per ton, trading at $787.90–$788.26 per ton on an FOB Gulf Coast basis (equivalent to 222.47–222.57 cents per gallon).

Market Forecast Currently, raw material prices are operating at high levels, and cost pressure remains significant. There is room for international oil prices to fall, and weak demand fundamentals are suppressing the refined oil market. MTBE analysts believe that the Chinese MTBE market may continue to decline.