SunSirs: China MTBE Market Continues to Rise

The domestic MTBE market has risen again. From April 1st to 12th, the price of MTBE increased from 7,275 RMB/ton to 7,512 RMB/ton, with a price increase of 3.26% during the cycle, a month on month increase of 10.07%, and a year-on-year decrease of 1.64%. Some companies have brought their equipment to port earlier, suspended export sales, and Shandong Shenfa has suspended maintenance. There are relatively few MTBE resources available for sale in the market, and the inventory pressure of manufacturers is not high. Therefore, manufacturers are actively pushing up their prices again. Downstream terminal operators are still active in purchasing, and there is not much pressure on manufacturers to ship. The MTBE market price has once again risen to a high level.

Cost side: Narrow decline in crude oil prices

International crude oil: Recently, the geopolitical tension has slightly eased, and international oil prices have fallen narrowly. The situation in the Middle East has not yet escalated further, and the peace talks between Palestine and Israel are still advancing, reducing potential supply risk concerns. As of April 11th, the settlement price of Brent crude oil futures main contract was $89.74 per barrel, a decrease of $0.74 or 0.8%.

Demand side: The rise of the gasoline market has led to an increase in MTBE procurement

In terms of gasoline, the international crude oil futures trend has been volatile, while the refined oil market in Shandong region has shown a strong upward trend. With the support of price adjustment expectations, various refineries have pushed up oil prices, increasing the purchasing operations of end users and traders, and the trading atmosphere in the market has heated up. Short term MTBE demand is influenced by favorable factors.

Supply side: More device shutdowns and reduced production

Units such as Dongying Qifa, Minghao Chemical, Shandong Yuhuang, and Qingzhou Tianan are currently in shutdown. The temporary shutdown of the Lihua Yi dehydrogenation unit has affected this week's production. The unit will start construction on April 7th, and the load will gradually increase. The Lu Shenfa unit will undergo maintenance on April 7th, resulting in a decrease in overall production. Short term domestic MTBE supply is affected by favorable factors.

Foreign markets tend to rise, with concentrated outbound shipments moving faster

As of the close on April 11th, the closing price of the Asian MTBE market has increased by $13.5/ton compared to the previous trading day, and FOB Singapore closed at $1,011.49-1,013.49/ton. The closing price of the European MTBE market increased by $10.25 per ton compared to the previous trading day, while the FOB ARA closed at $1,184.24-1,184.74 per ton. The closing price of the US MTBE market increased by $9.76/ton compared to the previous trading day, while the FOB Gulf offshore price closed at $1,014.79-1,015.15/ton (285.86-285.96 cents/gallon).

In the future market forecast, there is an expectation of an increase in resource supply, and the retail price limit for gasoline will be raised, providing certain support for the market. Under the long short game, MTBE analysts from SunSirs believe that the domestic MTBE market may consolidate and observe in the short term.

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