European MTBE supply was said to be long on Thursday

Chemical Industry

– MTBE falls $9.75/mt on day

– Blending demand low

European MTBE supply was said to be long on Thursday, with also little demand seen from gasoline blenders. “Demand is poor, there is almost none,” a source said. Other blending components were considered to be better value than MTBE. In the US market, there was similarly low demand, with producers heard lowering offers but finding no takers. In the Market on Close process, a contango structure appeared in the market, with a trade seen for the mid-window at $809/mt, while an outstanding offer for the front end was left at $802/mt. In Asia, it was announced on Thursday that China’s Hengli Petrochemical is planning to begin commercial operations at its new 600,000 mt/year MTBE plant in early May. This would increase total Chinese MTBE capacity by over 24% to around 3.07 million mt/year, S&P Global  data showed. In the upstream crude market, following strong gains seen over the Easter weekend, the market was relatively stable on Thursday.

RATIONALE:

S&P Global assessed European MTBE at $805.25/mt on Thursday, down $9.75/mt from Thursday. In the Market on Close process, there was an outstanding offer for April 29-May 3 loading at $802/mt. $801/mt was assessed as the value for these dates. There was also a trade before the end of the process between Litasco and Lyondell for loading May 2-6 at $809/mt. This value was assessed for the mid and back of the curve. The average of the curve came to $805.25/mt. ETBE was assessed at a $150/mt premium to MTBE Thursday, stable to Thursday, with no disproving indications heard.

 

Chemical Industry
Chemical Industry

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