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SunSirs: High Level Consolidation of China MTBE Market
March 25 2024 11:31:16SunSirs(Selena)

According to the Commodity Market Analysis System of SunSirs, the domestic MTBE market is at a high level of consolidation. From March 18th to 22nd, the price of MTBE increased from 6,,962 RMB/ton to 7,025 RMB/ton, with a price increase of 0.90% during the cycle, a month on month increase of 7.46%, and a year-on-year decrease of 2.60%.

The domestic MTBE market has been consolidating at a high level, with average purchasing enthusiasm among end-users at the beginning of the week, and manufacturers offering discounts for shipments. As we enter the second half of the week, the international crude oil trend is good, and with positive support, prices have rebounded to high levels. However, after rebounding to high levels, the mentality of operators has returned to caution, and the market has stabilized and operated, with slight discounts on market prices.

On the cost side, in terms of crude oil, high international crude oil prices are considered volatile. In the early part of the week, due to the tense geopolitical situation in the Middle East, there was support; In addition, the expected reduction in production by oil producing countries is also a major factor supporting oil prices, leading to an increase in international oil prices. In the later part of the week, weak data on US gasoline demand and reports on a draft resolution calling for a ceasefire in Gaza by the United Nations have put pressure on oil prices. As of March 21st, the settlement price of Brent crude oil futures main contracts was reported at $85.24 per barrel, a decrease of $0.14 or 0.2%.

On the demand side, in terms of gasoline, international crude oil futures have fluctuated upwards, while the refined oil market in Shandong region has remained stable and upward. However, the sales focus of refineries in the region is still on volume, with middle and downstream merchants purchasing on demand while consuming inventory. The market trading atmosphere has weakened. The gasoline market is operating steadily with a strong trend, with MTBE rising successively and the market fluctuating frequently. Short term MTBE demand is influenced by favorable factors.

On the supply side, facilities such as Dongying Qifa, Minghao Chemical, Zhonghao Construction, Dongying Shenchi, Anqing Taifa, Dechen Energy, and Shandong Yuhuang are in shutdown, while Shandong Chengtai facilities are suspended. At the same time, Yuhuang's shutdown continues to affect this week's production, resulting in a decrease in production compared to last week. Next week, Dechen, Shenchi and others have plans to start production, and it is expected that production may increase. Short term domestic MTBE supply is affected by bearish factors.

As of the close on March 21st, the closing price of the Asian MTBE market has increased by $4/ton compared to the previous trading day, and FOB Singapore closed at $983.99-985.99/ton. The closing price of the European MTBE market has decreased by $4.75 per ton compared to the previous trading day, while the FOB ARA closed at $1,136.24-1,136.74 per ton. The closing price of the US MTBE market has decreased by $26.13 per ton compared to the previous trading day, while the FOB Gulf offshore price closed at $1,064.49-1,064.85 per ton (299.86-29.96 cents per gallon).

In the future, prices are currently operating at a high level, and businesses still have a cautious attitude, with on-demand procurement as the main focus. In the early stages, manufacturers such as Shenchi and Dechen have plans to start production, and resource supply is expected to increase. At that time, under increasing supply and demand pressure, the market may have narrow concessions, but the expected magnitude is limited. SunSirs MTBE analysts believe that the domestic MTBE market may consolidate and observe in the short term.


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