MTBE Market Trend in China Shows Weak Consolidation

May 8th News

According to the commodity market analysis system, after the holiday, the price of MTBE fell from 6,400 CNY/ton to 6,333 CNY/ton, with a price decrease of 1.04% within the period, a month-on-month decrease of 11.68%, and a year-on-year increase of 29.91%. The Chinese MTBE market showed a weak and volatile trend. After the holiday, there was a significant drop in international crude oil prices, which had a major negative impact on market sentiment. The trading atmosphere was poor, and the price of MTBE slightly decreased.

MTBE China Production Price Average Trend Chart:

Cost Perspective: Regarding crude oil, international oil prices have fallen sharply. The primary negative factor is the growing likelihood of a memorandum of understanding being reached between the U.S. and Iran, significantly increasing the probability of an end to the conflict. Additionally, Iran plans to gradually resume navigation through the Strait of Hormuz, leading to a marked easing of market risk aversion. As of May 7, the settlement price for the July Brent crude oil futures contract was reported at $100.06 per barrel.

Demand Side: On the downstream side, international crude oil futures have been fluctuating downward, and prices of refined oil products have continued to decline. News reports indicate that local refineries are cutting prices and offering promotions to boost sales; however, insufficient terminal demand is causing slow destocking in social inventories, and the market remains heavily cautious. The demand for MTBE is being weighed down by predominantly bearish factors.

Supply side: Qixiang Tengda's isobutane dehydrogenation plant has started operation, while the shutdowns of Luxinfar and Shandong Chengtai have affected production. Zhonghao Jian's dehydrogenation plant has started operation, but Huayi Chemical has shut down, leading to a decline in the overall facility utilization rate. The supply side for MTBE is influenced by positive factors.

As of May 8, statistics on MTBE factory prices from selected manufacturers:

As of the close on April 17, the Asian MTBE market closed at a price that was $46.62 per ton lower than the previous trading day, with FOB Singapore quoted at $936.57–$938.57 per ton. The European MTBE market closed at a price that was $33 per ton lower than the previous trading day, with FOB ARA quoted at $1098.49–$1098.99 per ton. The U.S. MTBE market closed at a price that was $36.87 per ton lower than the previous trading day, with FOB Gulf offshore prices quoted at $1108.24–$1108.60 per ton (312.92–313.02 cents per gallon).

Market Outlook: Gasoline terminal demand remains subdued, while raw material costs remain high, providing some fundamental support. MTBE analysts believe the MTBE market will likely continue to trade in a weak and consolidating range.