SunSirs: China MTBE Market Trend Shows Significant Decline

According to the Commodity Market Analysis System of SunSirs, from October 13th to 17th, MTBE prices fell from 5,125 RMB/ton to 5,020 RMB/ton, with a price drop of 2.03% during the cycle, a month on month drop of 3.03%, and a year-on-year drop of 7.45%. The domestic MTBE market is running weakly, and the focus of transactions has fallen. After the National Day holiday, the demand for gasoline terminals gradually weakened, and the MTBE market experienced a relatively slow decline before being supported by exports. The export volume of some units increased significantly, and gasoline demand remained weak. MTBE manufacturers increased their profit margins.

Cost aspect: In terms of crude oil, the international oil price has fallen, and the main negative factors are the International Energy Agency's warning of the risk of long-term oversupply, as well as the trade dispute triggered by the United States suppressing demand prospects, all of which have put pressure on the oil market. As of October 16th, the settlement price of Brent crude oil futures for the December contract was $61.06 per barrel.

On the demand side: In terms of downstream gasoline, there is room for international oil prices to decline, and the expectation of a new round of retail price limits for refined oil products has been lowered. Under the pressure of negative news, the refined oil market is weak and difficult to change. The MTBE demand side is affected by bearish factors.

Supply side: Sanjiang Petrochemical's new plant starts construction, Heilongjiang Xinrui Chemical Plant starts construction, Lihua Yi Dehydrogenation Plant undergoes maintenance, resulting in an increase in plant operating rates. Short term domestic MTBE supply is affected by bearish factors. The Yuhuang plant in Shandong has started construction, and the load is gradually increasing. The construction load in Sanjiang may also increase, and it is expected that the supply of resources may increase.

As of the close on October 16th, the closing price of the Asian MTBE market has increased by $5.15/ton compared to the previous trading day, with FOB Singapore closing at $638.17-640.17/ton. The closing price of the European MTBE market increased by $17.75 per ton compared to the previous trading day, and FOB ARA closed at $843.74-844.24 per ton. The closing price of the MTBE market in the United States decreased by $8.04/ton compared to the previous trading day, and the FOB Gulf offshore price closed at $775.86-776.21/ton (219.07-219.17 cents/gallon).

The future forecast of raw material prices may be weak, and the cost support power is insufficient. Part of the large manufacturers' export port consolidation is coming to an end, and domestic sales are increasing. The MTBE analyst from SunSirs believes that the domestic MTBE market is mainly characterized by weak fluctuations.

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