17 September 2010 04:16 [Source: ICIS news]
By Felicia Loo
SINGAPORE (ICIS)--Prices of methyl tertiary butyl ether (MTBE) in Asia have surged to a near five-month high, and may soar further as Chinese blenders are scrambling for imported barrels ahead of the week-long National Day holiday, market players said on Friday.
MTBE prices were quoted at near $800/tonne (€608/tonne) FOB (free on board) ?xml:namespace>
MTBE is used as an additive to improve gasoline's octane levels.
“It’s pre-holiday demand season in
After all, passenger car sales in
Car sales are likely to increase, as the Chinese economy grew at a yearly rate of 11.1% in the first half of this year, up 3.7 percentage points from the same period last year.
Domestic MTBE prices in
Demand was outpacing supply in
Chinese buying ideas edged up to $800/tonne CFR (cost and freight)
“It’s basically a sellers’ market,” one trader said.
For this week, there were no signs of MTBE imports into the Chinese
On signs of the MTBE strength, spot premiums in
The spread between 92-RON and naphtha widened to $7-8/bbl from $6.30/bbl last week, signifying a bullish MTBE market, traders said. The rule of thumb for profitability in blending, or reforming margin, usually hovers at $5.50/bbl.
In southeast Asia, MTBE supply was scarce.
Adding to razor-thin supply, petrochemical giant Saudi Basic Industries Corp (SABIC) had taken off line the smallest of its three MTBE plants at
The 300,000 tonne/year MTBE plant was closed for repairs, while SABIC continued to run the two other MTBE plants at the same site, with capacities of 1m tonnes/year and 700,000/tonnes/year.
As a result, SABIC reduced its spot MTBE supply in
Underscoring the supply tightness, onshore stocks of naphtha, gasoline and reformate in Singapore fell 1.302m barrels in the week ended 15 September to a three-week low of 10.56m barrels, industry data showed.
But falling global crude futures would put lid to MTBE price gains, traders said.
“Crude is coming off and (MTBE) prices are simply too high now,” said a trader in
NYMEX light sweet crude futures drifted lower on Friday at under $75/bbl – falling for a third day – as a major Canada-US crude pipeline was poised to resume flows on Friday, restoring crude exports to the US Midwest.
($1 = €0.76 ; $1 = CNY6.73)Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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