Fluctuations in Downstream Gasoline Demand Regulate the Global MTBE Prices
- 07-Nov-2022 7:00 PM
- Journalist: Patricia Jose Perez
Hamburg, Germany- In the Asian market, the major Methyl Tertiary Butyl Ether (MTBE) refiners reduce the gasoline output in the expectation of bearish domestic sales for the upcoming trading cycle. In terms of the upstream market, Asian Naphtha was increasingly oversupplied with weak market fundamentals and adequate product availability. In the significant MTBE exporting country, Singapore, the price faced a Southward trend with lower trading activities for the overseas suppliers. Accelerating inflation and seasonal low-driving trading activity continued to pressure the MTBE market to avoid stockpiling inventories. Feedstock Methanol prices also faced a downward trend due to sufficient product supply and rising production rates among the manufacturing units.
In the European market, the FOB price of MTBE stabilizes at USD 1094/tonne with a fluctuation of 0.45% on the lower side. MTBE prices are still on the higher end, supported by inflation, which resulted in the willingness of gasoline traders to purchase weakened. This week, the MTBE market remained flat, and suppliers bought the product on a need-to basis. Feedstock Methanol prices also fell with weak benchmark futures, disrupting supply/demand fundamentals.
In the USA, MTBE prices showcased a steady trend with tepid product purchasing activity. Slower MTBE demand from downstream gasoline blending and bearish feedstock Methanol market resulted in such price dynamics in the USA. Gradual increase in downstream gasoline inventories and ease in energy prices resulted in a bearish price trend.
According to ChemAnalyst, with consumer confidence faltering and regional currency weak against the US dollar, the global MTBE market can narrow further in the forthcoming weeks. In December 2022 and throughout the winter, the US intends to release millions of barrels of oil from the Strategic Petroleum Reserve, which might lower MTBE costs in the area. The price could decline further in the Asian market with a weak feedstock Methanol market. With the year-end, suppliers will try to destock their existing inventories by offering discounts on the Petrochemical cargoes.