SunSirs: China MTBE Market Continued to Rise in March

According to the Commodity Market Analysis System of SunSirs, the domestic MTBE market has rebounded and fluctuated. From March 1st to 29th, the price of MTBE increased from 6,625 RMB/ton to 7,252 RMB/ton, with a price increase of 9.47% during the cycle and a year-on-year decrease of 0.73%.

At the beginning of the month, the domestic MTBE market began to show an upward trend, with some large manufacturers starting to export and gather at ports, resulting in a significant reduction in resource supply. At the same time, some large manufacturers temporarily stopped production. Supported by the reduction in resource supply, the enthusiasm of manufacturers to push up prices further increased, and end operators moderately sought to purchase, leading to a significant upward trend in the MTBE market.

In the first half of the month, the domestic MTBE price showed a significant increase, mainly due to some large manufacturers delivering export orders, while there were orders waiting to be delivered in the gasoline sector. Business owners had a high enthusiasm for purchasing related gasoline raw materials. At the same time, some manufacturers stopped production or reduced their burden, resulting in a tight supply of resources. Overall, the overall multiple benefits were good, and the domestic MTBE market was actively pushing up, making it difficult to find low-priced spot goods.

In the latter half of the month, the domestic MTBE market saw a high-level consolidation. At the beginning of the week, the purchasing enthusiasm of terminal operators was average, and manufacturers offered discounts to ship. As we entered the second half of the week, the international crude oil trend was good, and with positive support, prices rebounded to high levels. However, after rebounding to high levels, the mentality of operators returned to caution, and the market stabilized, with slight discounts on market prices.

As the end of the month approaches, the domestic MTBE market continues to rise, mainly due to terminal operators still having a certain amount of stock demand. At the same time, the international MTBE market is operating at a high level, and there are still some export orders signed, which provides positive support for the domestic market. At the same time, the operating level of MTBE equipment is still low, and the supply of resources is insufficient. Manufacturers are currently under no significant pressure to increase prices and ship more, while prices remain high and organized.

In terms of cost and crude oil, the US economic growth rate in the fourth quarter was revised up, partly due to strong consumer spending. In addition, the number of people seeking unemployment benefits decreased, indicating that the labor market situation remains strong. In addition, as the summer driving season approaches in the United States, gasoline consumption expectations increase, and the demand side also provides support for crude oil. Overall, oil prices may remain relatively strong in the near future. As of the close on March 28th, the settlement price of Brent crude oil futures main contract was $87.00 per barrel, an increase of $1.59 or 1.9%.

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 bias, and MTBE prices continue to rise, resulting in frequent market increases. 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 shut down. At the same time, Yuhuang's shutdown continues to affect production. In the short term, 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.

In terms of external trading, as of the close on March 28th, the closing price of the Asian MTBE market has increased by $7/ton compared to the previous trading day, and FOB Singapore closed at $977.99-979.99/ton. The closing price of the European MTBE market increased by $10.5 per ton compared to the previous trading day, while the FOB ARA closed at $1,144.49-1,144.99 per ton. The closing price of the US MTBE market increased by $17.29/ton compared to the previous trading day, while the FOB Gulf offshore price closed at $986.93-987.28/ton (278.01-278.11 cents/gallon).

In the future market forecast, resource supply is relatively tight in the short term. As the Qingming Festival approaches, there is a certain demand for gasoline stock, and the trading atmosphere is heating up. However, due to relatively flat profits, downstream may have resistance to high priced gasoline raw materials, and there may be some resistance to the rise of the MTBE market. SunSirs MTBE analysts believe that in the short term, the domestic MTBE market may mainly consolidate at high levels.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.