SunSirs: China MTBE Market Hits Bottom and Rebounds

According to the Commodity Market Analysis System of SunSirs, from June 9th to 13th, MTBE prices fell from 5,007 RMB/ton to 5,252 RMB/ton, with a price increase of 4.89% during the period, a month on month increase of 3.91%, and a year-on-year decrease of 18.25%. The domestic MTBE market is experiencing a volatile upward trend, mainly boosted by the strengthening of international crude oil prices, especially the significant jump in oil prices on the last trading day, injecting strong positive news into the market. From the perspective of supply and demand, with manufacturers such as Shandong Lushanfa, Dongying Shenchi, and Shandong Yuhuang starting production one after another, the supply of market resources has increased. However, at the same time, the active signing of export orders has effectively eased supply pressure, keeping manufacturers' inventory at a controllable level and driving market prices to remain firm.

On the cost side, in terms of crude oil: International oil prices have significantly risen, mainly due to positive developments in the new round of economic and trade talks between China and the United States. The decline in US commercial crude oil inventories has exceeded expectations, coupled with uncertainties in US Iran relations, providing support for oil prices. As of June 12th, the settlement price of Brent crude oil futures for the August contract was $69.06 per barrel.

On the demand side, in terms of gasoline terminal demand, the expectation of a new round of retail price limits has been raised, which has a certain positive effect on the gasoline market. The MTBE demand side is influenced by favorable factors.

Supply side: Shandong Lushanfa, Dongying Shenchi, and Shandong Yuhuang plants have started construction, with an increase in plant operating rates. Short term domestic MTBE supply is affected by bearish factors.

As of the close on June 12th, the closing price of the Asian MTBE market has increased by $14.2 per ton compared to the previous trading day, with FOB Singapore closing at $700.95-702.95 per ton. The closing price of the European MTBE market increased by $6.25/ton compared to the previous trading day, and FOB ARA closed at $763.74-764.24/ton. The closing price of the MTBE market in the United States decreased by $8.47/ton compared to the previous trading day, and the FOB Gulf offshore price closed at $695.18-695.54/ton (196.29-196.39 cents/gallon).

The future forecast shows that the current raw material prices are high, and cost pressure still exists. Many manufacturers have resumed work one after another, and the supply side is expected to be relatively abundant. There are still many manufacturers waiting to deliver export orders in the near future, which provides some favorable support. The MTBE analyst from SunSirs believes that the domestic MTBE market is mainly volatile.

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