SunSirs: China MTBE Market Fluctuation and Downtrend in October

According to the Commodity Market Analysis System of SunSirs, the domestic MTBE market is fluctuating and declining. From October 7th to 30th, the price of MTBE dropped from 7,900 RMB/ton to 6,950 RMB/ton, with a decrease of 12.03% during the cycle and a year-on-year increase of 0.14%.

In terms of cost and crude oil, the crude oil market continued to experience strong fluctuations in October. At the beginning of the month, the situation on the mainland is volatile, and oil prices may intensify volatility, with an increase in amplitude. The mid-term supply-demand game will continue, with tight supply and slowing demand remaining the main themes of oil price trading. The weekly inventory report released by the US Energy Information Administration (EIA) in mid month showed that US crude oil inventories unexpectedly dropped significantly last week, with a more than expected decrease. Coupled with tensions in the Middle East, this has brought a bullish trend to the crude oil market, with prices hitting nearly two week highs. With the strengthening of diplomatic efforts and the easing of tensions between Palestine and Israel, the market has shown some optimism about supply restrictions, and the oil market has come under pressure and declined. Overall, crude oil prices are still at a high level.

In terms of demand and gasoline, the gasoline market has seen a decrease in downstream users' purchasing enthusiasm due to poor shipments from retail gas stations, and many merchants maintain low inventory levels for procurement and sales. Refineries have only adopted price reduction promotions. Short term MTBE demand side is influenced by bearish factors.

On the supply side, the operating rate of MTBE devices remains high, and resource supply is still relatively abundant. The main operating rate is relatively high, and devices such as Shenyang Waxing Chemical, Dongying Qifa, and Maoming Shihua are still in shutdown. After the start of construction on Debao Road, production continues to be affected, and short-term resource supply has increased narrowly. The supply side of MTBE is affected by bearish factors.

In terms of external trading, as of the close on October 27th, the closing price of the Asian MTBE market has increased by $10/ton compared to the previous trading day, while FOB Singapore closed at $967.05-969.05/ton. The closing price of the European MTBE market increased by $12.25/ton compared to the previous trading day, while the FOB ARA closed at $1,094.99- $1,095.49/ton. The closing price of the MTBE market in the United States decreased by $2.45/ton compared to the previous trading day, while the FOB Gulf price closed at $911.17-911.52/ton (256.67-256.77 cents/gallon).

In the future, it is predicted that some manufacturers will begin to export to Hong Kong, which will alleviate the abundant supply of domestic resources to some extent. However, the short-term boost is relatively limited, and manufacturers will still prioritize active sales, with prices showing weak performance. SunSirs MTBE analysts believe that in the short term, the domestic MTBE market may be dominated by fluctuations and consolidation.

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