MTBE prices in China’s Shandong province likely to stabilise

27 August 2012 10:37  [Source: ICIS news]

SINGAPORE (ICIS)--Prices of methyl tertiary butyl ether (MTBE) at Shandong province in China are expected to stabilise in the short term, because the prevailing low supply will be balanced out by weak buying interest, market sources said on Monday.

Prices of MTBE with around 98% purity were assessed at yuan (CNY) 9,050-9,150/tonne ($1,423-1,439/tonne) in Shandong on 27 August, down by CNY1,800/tonne compared with CNY7,250-7,350/tonne in early July, according to C1 Energy, an ICIS service in China.

MTBE prices have been rising since early July to nearly a four-month high on 27 August as firmer international crude oil prices boosted sentiment in the gasoline market and that consequently increased MTBE consumption, traders said.

Around 90% of MTBE in China goes into the gasoline blending market.

However, the current high prices have weakened buying interest and some market players said they are largely consuming the MTBE stocks that they have previously purchased, while gasoline blenders are buying on a hand-to-mouth basis.

MTBE producers in Shandong indicated that their inventories are low as a result of the smooth sales in previous weeks. Hence, they will not cut prices, given that international crude prices are firm as well. Buyers, on the other hand, are unlikely to raise buying ideas as the current prices are considered too high.

($1 = CNY6.36)

By: Song Jing
+65 6780 4359

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