For the Quarter Ending June 2021
During the second quarter of 2021, MTBE trading was bolstered as export volumes to the Europe and South Asian region surged in the second half of the quarter, owing to the restored industrial activities in the US Gulf coast. After the impact of winter storm Uri, the production rates improved at several manufacturing plants throughout the North American region. The MTBE pricing trend showed mixed results but stabilized by the quarter ending as healthy production margins and rising demand from Mexico provided the cost support in the US domestic market. FOB Texas MTBE offers in May were traded at USD 680 per tonne, taking cues from the improved market sentiments amidst the mass vaccination programme and surged the offtakes from the gasoline blending sector.
Overall MTBE demand outlook in India was curtailed in Q2 as the public movement was largely restricted amidst the rising COVID cases in India and reimposition of lockdown restrictions. Hence, India MTBE offtakes were significantly reduced in the first half of the second quarter. Demand remained steady in China as the imposition of consumption tax in mid-June by the Chinese authorities supported the MTBE pricing trend. Hence the Asian blenders kept a conservative approach to procure large volumes of MTBE. The gasoline blending demand in China and Malaysia remained pressured while domestic inventories in South Korea showed a rise in Q2.
MTBE supplies in the European region were surged as the mass vaccination programmes eased the public movement in the several parts across the Europe, strengthening the prospects for the regional gasoline blenders. Furthermore, the market outlook was supported by better shipments from the USA. Imports further eased as a major manufacture from the Middle East ended its turnaround in the second quarter. Constant offtakes from the pharmaceuticals sector further improved the MTBE demand in Europe. FOB ARA (Amsterdam-Rotterdam-Antwerp) MTBE offers were assessed around USD 687 per tonne in the first half of the quarter.
For the Quarter Ending March 2021
MTBE supplies in the North American region were tight, during the first quarter of 2021. Rigorous freeze weather in the Texas and nearby US gulf region which forced to shut down several crackers as the several upstream plants could not operate in such cold weather conditions. However, the demand took a steep uptrend amid the short supply condition, hence resulting in reduced exports to other regions in Q1 2021. MTBE prices in the US surged by +USD 75/ton to USD 670/ton in FOB New York.
The Asian MTBE market remained largely constrained during Q1 2021. The supply tightness was largely attributed to tightened imports from the Middle East region, followed by turnaround at a major facility in SABIC. The supplies from the Middle East region were largely diverted towards the western region in anticipations of better throughput, which further led to supply shortfall in Asian markets. The demand from the gasoline blending industries, due to the resumption of industrial and commercial activities in the region. The constant consumption propped up the regional prices of MTBE in first half of the quarter. Moreover, globally short upstream supply in February inclined the prices by a significant percentage.
During the first quarter of 2021, MTBE supplies were constrained in the European region, as several facilities were operating at reduced efficiencies due to the severe cold weather in the north west European region. Furthermore, the domestic consumption declined due to lockdown in major parts of the region, which resulted in reduced demand from the downstream gasoline blenders. However, the market got a significant push with rising enquiries on export volumes to fill in the gap created by the US.
For the Quarter Ending September 2020
Supply of Methyl Tertiary Butyl Ether (MTBE) in the Southeast Asian market remained mixed amidst several plant turnarounds and plant start-ups in the region. As by early September Chandra Asri of Indonesia started off its MTBE plant while by the September-end, S-Oil of Korea was heard implementing a maintenance turnaround at its MTBE facility. The supply crises were exacerbated by the turnaround at Taiwan’s Formosa plant in the second half of the third quarter due to a fire hazard at its upstream facility. Demand remained feeble due to reduced oil consumption as a repercussion caused by the global Pandemic. Reduced spread between derivative 92 RON gasoline and MTBE gave a prominent reflection of its reduced consumption in the regional petrochemical market, that consequently has a direct effect on its prices as well. However, the prices of MTBE pharma grade witnessed an appreciable rise in demand since the onset of Coronavirus. In line with the market outlook, prices of MTBE Pharma grade in India witnessed continuous upsurge and were assessed at USD 1250 per MT.
As production was severely hit by heavy repercussions of Hurricanes in the US Gulf Coast region, supply crises remained persistent from early 2020 till the third quarter of 2020. The export potential of the region also weakened in comparison to the previous financial year as the consumption of petrochemical products slumped due to surging Covid-19 infections. However, the consumption of MTBE improved with respect to the previous quarter as various countries resumed the market activities with ease in Covid-19 containment measures. Overall, the US MTBE market suffered a loss since major part of domestic production caters the global demand.
Considerable ease in containment measures across Europe provided a prominent ease in its supply fundamentals. In line with active resumption in market activities, operating rates also improved from July to September. Peak demand season in the European region aided the revival in consumption of methanol-based fuel oxygenate along the countries in the Mediterran8an region like Spain, Greece and Italy. Even after the resurgence of Coronavirus in several parts of the region, MTBE market remained balanced, driven by high seasonal demand.