Asian MTBE: Up $13/mt on trade done

Chemical Industry

– MTBE extends gains

– Bullish sentiment lingers in MTBE market

Asian MTBE extended gains and was up $13/mt to be assessed at $704/mt FOB Singapore on a trade done at the same level during the S&P Global  Market on Close assessment process Thursday. Tricon registered a 3,000-mt April 3-7 loading cargo at $684/mt FOB Singapore, which was brought up to $704/mt FOB Singapore and was taken out by Gunvor at that level. The MTBE factor, which measures the ratio between the daily FOB Singapore MTBE and 92 RON gasoline, was at 1.148, up from 1.125 the day before. “There are not many cargoes for sale on the FOB Singapore today,” a Singapore-based trader said. “The market is really quiet so far,” a producer in Southeast Asia said. Meanwhile, bullish sentiment was seen in gasoline blending. “Our crude view is bullish. Our view is that it will surely touch $70/b and then come back down again…” an East Asian petrochemicals producer said Thursday, indicating that the bullishness in upstream crude would give MTBE and other gasoline blendstock prices a lift in the future. In related news, gasoline blending demand remained firm on the day but gasoline fundamentals weakened slightly, as reflected by the 92 RON-Brent cracks which fell 10 cents/b to $5.70/b, perpetuating, but narrowing, the positive spreads on Thursday. The inter-RON spreads were all flat from Thursday, with the 95/92 RON spread at $1.60/b, the 97/92 spreads at $3.26/b, and the 97/95 RON spread at $1.66/b. The 92 RON, 95 RON and 97 RON prices all fell slightly from Thursday to be assessed at $72.58/b, $74.18/b and $75.84/b, respectively. Naphtha gained 27 cents/b to be assessed at $59.49/b FOB Singapore. On Thursday, the 92 RON-FOB Singapore naphtha spreads, which can also be used to reflect the viability of using MTBE as a blend component, fell to $13.09/b from $13.50/b in the previous assessment day, while the MTBE-naphtha crack was at $201.31/mt, gaining some $10/mt from the previous assessment day.

RATIONALE:

The FOB Singapore marker was assessed $13/mt higher from the previous assessment day at $704/mt FOB Singapore Thursday, at the level of a 3,000-mt trade done for April 3-7 loading during the MOC process. The FOB Singapore marker takes an average of the 15th to 40th day laycans, currently March 28 to April 22. The H2 March, H1 and H2 April laycans were assessed at $704/mt FOB Singapore, maintaining a flat market structure for all 3 laycans. The MTBE factor was up from Thursday at 1.148 Thursday.

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