MTBE Market Conditions Remain Weak

December 19th, news

According to the commodity market analysis system, from December 12 to 19, the price of MTBE fell from 4,967 CNY/ton to 4,967 CNY/ton, with a price decrease of 0.70% within the period, a month-on-month decrease of 0.10%, and a year-on-year decrease of 10.85%. The international crude oil market performed poorly, leading manufacturers to slightly lower prices to promote sales. However, high raw material costs provided some support, and manufacturers were reluctant to significantly reduce prices. Some previously shut-down facilities resumed operations, while others halted production, resulting in a slight reduction in overall resource supply. The reduction in supply and weak demand created a balancing act. The MTBE market was mainly characterized by weak and fluctuating conditions.

MTBE China Production Price Average Trend Chart:

Cost Perspective: Regarding crude oil, international oil prices have fallen. The primary negative factor is the growing market concern over a prolonged supply surplus, compounded by positive signals from ongoing Russia-Ukraine peace talks, putting downward pressure on oil prices. As of December 18, the settlement price for the February Brent crude oil futures contract was reported at $59.82 per barrel.

Demand Side: On the downstream gasoline front, international oil prices still have room to rise. However, given the anticipated reduction in retail price caps for refined oil products this round, the sluggish market conditions for refined oils are unlikely to change. Both buyers and sellers are adopting a rational approach, and a wait-and-see atmosphere continues to prevail in the market. The demand side for MTBE is being weighed down by bearish factors.

Supply side: Dechen Energy and Hebei Xinxinyuan's facilities have started operations, while Shandong Chengtai and Yuhuang Shengrong's facilities have stopped. Overall, the facility utilization rate has decreased. The MTBE supply situation is positively influenced by these factors.

As of December 19, statistics on MTBE factory prices from selected manufacturers:

As of the close on December 18, the Asian MTBE market closed at a price that was up $4.39 per ton from the previous trading day, with FOB Singapore prices ranging from $611.43 to $613.43 per ton. In the European MTBE market, prices closed down $13.5 per ton from the previous trading day, with FOB ARA prices ranging from $685.49 to $685.99 per ton. In the U.S. MTBE market, prices closed up $2.48 per ton from the previous trading day, with FOB Gulf offshore prices ranging from $602.36 to $602.71 per ton (170.08 to 170.18 cents per gallon).

Market Forecast: Raw material prices remain at high levels, causing manufacturers to incur losses and strengthening their willingness to hold prices. Some large-scale manufacturers are fulfilling earlier export orders, providing some floor support to the market. However, gasoline demand remains weak, and the supply-demand dynamics continue to be in a state of tug-of-war. MTBE analysts believe that the Chinese MTBE market will likely continue to trade in a weak and consolidating manner.