Global MTBE Market Inched Lower in the Wake of Sluggish Demand

Hamburg, Germany- The supply of Methyl Tertiary-Butyl Ether (MTBE) in the global market is increasing, and weak demand makes it difficult for the producers to increase the prices. In terms of raw materials, Methanol prices continue to face a downward price trend with lower benchmark futures.

In the Asian market, the continuous decline in the exchange rate of significant MTBE-producing countries against the US dollar and lower bidding make trading more difficult. With the rising supply, Asian MTBE production faces the risk of further shrinking their operating units. In terms of enterprises, Shandong Chengtai New Materials and Dongming Qianhai Chemical also lowered their offers for domestic and international suppliers. On 22^nd November 2022, the price of MTBE in China declined to USD 1040/tonne FOB Dalian.

With the slump in international crude oil prices, European MTBE prices declined along with the cost of downstream gasoline. Future settlements in the region fell with lower exports from Germany to other European regions. Affected by the economy, the overall supply among the enterprises was high, with weak trading dynamics. The current demand is still weak, and a continued stock reduction will remain a concern for many suppliers in the forthcoming weeks.

In the US, the slump in feedstock Methanol prices due to the declining Natural gas market, trading of MTBE inched lower. Producers' inventory levels increased, pushing suppliers to clear stock levels. On 22^nd November, the price of MTBE in the US slipped to USD 1171/tonne FOB New York. Exports from the USA to South America declined as sufficient stocks and weak demand for fresh supply hampered the trading dynamics.

According to ChemAnalyst, the price of MTBE will remain tight and may still rise in the upcoming weeks. The downstream gasoline producers will exhaust the supply, and the global market will gain price support. The port inventories will also decline, increasing the MTBE market's benchmark futures. While entering winter, supply-side disturbances will increase, accelerating consumption from the downstream gasoline market.