In the last week of August 2025, the Chinese Methyl Tert-Butyl Ether (MTBE) market was generally steady, supported by weak gasoline demand, a volatile crude oil market, and a largely oversupplied methanol situation. While some temporary support from exports and production changes at several plants was noted, sentiment remained cautious.
Key Takeaways
Demand-Side Developments
The MTBE market saw various trends over August. In the early trading in August, some export activity from major producers such as Lihua Yi provided temporary support. Moving toward mid-month, enthusiasm for trading was calmer, with purchasing intentions lower. By the end of August, terminal gasoline demand decreased an additional amount, as the seasonal peak had ended. Purchases were largely in "just-in-need" volumes, and discounts offered by MTBE producers showed that low sentiment continued.
Supply-Side Conditions
Supply fundamentals remained volatile throughout the month for MTBE. While some large producers consolidated exports earlier, late August saw a shift with increased external sales, raising domestic availability. The end of the month was especially consequential, as several unit turnarounds occurred--though this included shutdown plans for Dongming Qianhai and Heilongjiang Xinrui, and a restart plan for Yuxin's unit in Huizhou. Not only were the producers involved with these plans also discerning supply conditions, but they probably contributed to shifting conditions overall. In this context, overall supply conditions trended bearish.
Cost & Feedstock Analysis
Crude oil, a major cost driver, continued to soften through August, continuing to increased production from OPEC+, and geopolitical tensions eased. This reduced upstream cost support for MTBE producers. Meanwhile, methanol – the primary feedstock – remained under pressure, with domestic production steady and imports healthy. Rising inventories in East and South China weighed on sentiment, keeping feedstock prices subdued.
Crude oil values showed a steady decline of nearly 2% in August compared to July, extending a downward movement that began in May. The trend reflects increased supply pressure from OPEC+ and easing geopolitical risks, which reduced overall cost support for downstream markets like MTBE.
Methanol prices slipped by around 2% in August compared to July, continuing a soft pattern seen since March. Ample supply from both imports and domestic production pushed inventories higher in East and South China, keeping market sentiment bearish and limiting upward cost momentum for MTBE.
Diving deep into ChemAnalyst’s Quantitative Analysis
The monthly MTBE trend indicates a downturn of around 3% from July to August, following a period of strength in early summer.
Near-Term Market Direction
Given that gasoline demand is fading and crude oil prices are weakening, market participants should expect MTBE sentiment to remain subdued going forward. While there is a possibility that some supply adjustments could provide some short-term support, weak fundamental drivers will dominate the market overall. Market participants note that the MTBE market may have further downside risks, though anticipated prices suggest a minor uptick in September and October could occur for seasonal reasons.
