SunSirs: China MTBE Market was in Weak Consolidation

According to the Commodity Market Analysis System of SunSirs, the domestic MTBE market is experiencing a weak consolidation. From December 1st to 8th, the price of MTBE dropped from 6,575 RMB/ton to 6,537 RMB/ton, with a price drop of 0.57% during the cycle, a month on month decrease of 1.51%, and a year-on-year decrease of 4.39%. The international crude oil trend is not good, and the domestic MTBE market has slightly declined. Later, with the support of high raw material costs, manufacturers have slowed down their willingness to offer discounts, resulting in price stagnation and consolidation. Terminal operators are moderately seeking to purchase, while manufacturers prioritize quantity.

On the cost side, in terms of crude oil: Macroscopically, global economic data remains weak, and the market generally expects to maintain the current interest rate policy unchanged. It is possible that interest rate cuts will begin in March next year. On the supply and demand side, the increase in finished oil inventories in the United States last week exceeded expectations, especially the surge in gasoline inventories, which exacerbated the bearish sentiment in the market towards fuel demand. In addition, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have not tightened their production cuts as expected by the market. The expectation of loose supply has put pressure on oil prices.

On the demand side, in terms of gasoline, international crude oil futures are experiencing a weak downward trend, while the refined oil market has stopped rising and fallen. Some refineries have appropriately reduced prices to promote sales, and downstream merchants are purchasing on demand while consuming inventory. Large orders on the market are not easy to complete. The decline in the gasoline market has provided moderate support for the MTBE market. Short term MTBE demand is influenced by bearish factors.

On the supply side, facilities such as Shenyang Wax Chemical and Dongying Qifa are still in shutdown, while facilities such as Haite Weiye and Debao Road have been shut down. Manufacturers such as Qingzhou Tianan and Minghao have slightly reduced their operating load on their facilities, while some manufacturers continue to operate at low loads, resulting in lower production. The supply side of MTBE is influenced by favorable factors.

As of the close on December 7th, the closing price of the Asian MTBE market has decreased by $24.65/ton compared to the previous trading day, while FOB Singapore closed at $827.8-829.8/ton. The closing price of the European MTBE market has increased by $9/ton compared to the previous trading day, while the FOB ARA closed at $933.99-934.49/ton. The closing price of the US MTBE market has decreased by $23.61/ton compared to the previous trading day, while the FOB Gulf offshore price closed at $900.87-901.23/ton (253.77-253.87 cents per gallon).

In the future market forecast, in terms of resource supply, the operating rate has declined and resource supply has decreased. However, some manufacturers have completed their export port consolidation and gradually resumed domestic sales. Overall, they are still relatively abundant. In terms of terminal demand, operators still have a cautious attitude. SunSirs MTBE analysts believe that in the short term, the domestic MTBE market will mainly experience a narrow consolidation.

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