China’s MTBE prices likely to remain steady in April on weak crude

09 April 2012 08:33  [Source: ICIS news]

SINGAPORE (ICIS)--China’s methyl tertiary butyl ether (MTBE) prices are expected to remain steady in April, as tight supply and an expected rise in demand could be offset by weak crude prices, industry sources said on Monday.

MTBE supply in China will be tight this month as many domestic refiners have or will shut their plants for maintenance, market sources said.

Panjin Heyun New Materials shut in early April its 200,000 tonne/year MTBE unit at Panjin in Liaoyang for a 15-day turnaround, while Dalian West Pacific Petrochemical Co (WEPEC) shut on 3 April its 40,000 tonne/year MTBE unit in Dalian for maintenance until 16 April, company sources said.

Zhanjiang Dongxing Petrochemical plans to shut its 80,000 tonne/year MTBE unit at Zhanjiang in Guangdong on 10 April for a month-long turnaround, a company source said.

Few import cargoes are expected to arrive in China in April. Chinese traders have been showing little interest in imports since February this year because of negative import margins, domestic importers said.

China is expected to import at most 50,000 tonnes of MTBE in total for March and April, according to traders.

MTBE demand is expected to recover in April as the weather grows warmer and boosts gasoline consumption. MTBE is a major blending feedstock for gasoline and approximately 90% of China’s MTBE production is used for gasoline blending.   

A Chinese MTBE producer said the number of buying enquiries is increasing.

However, MTBE prices are unlikely to see any significant rise this month as the already-high prices are weakening buying interest, industry sources said.

MTBE prices in south China rose to yuan (CNY) 9,400/tonne ($1,490/tonne) on 5 April, a historical high since May 2011, according to C1 Energy, an ICIS service in China.

In addition, sentiment in the gasoline market is bearish because of weakening crude prices. A bearish gasoline market usually causes the MTBE market to be soft.

WTI closed at $103.31/bbl on 5 April, down by $1.92/bbl from 2 April.

($1 = CNY6.31)

By: Hedy Dong

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