UpdateAsia MTBE falls $53/tonne to seven-week low on weak crude

20 September 2012 11:07  [Source: ICIS news]

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SINGAPORE (ICIS)--Asia’s methyl tertiary butyl ether (MTBE) prices plunged by $53/tonne (€41/tonne) on Thursday to land at a seven-week low, tracking losses in the crude futures market, traders said.

MTBE prices were assessed at $1,101-1,103/tonne FOB (free on board) Singapore at the close of trade on Thursday, while ICE Brent was trading at above $107/bbl.

“Brent [crude] fell by close to $5/bbl in just one day, MTBE prices have to move down in tandem,” a Singapore-based trader said.

“Demand is already not good for now. With oil futures collapsing, there is no support on MTBE prices at all,” a Chinese trader said.

“Both gasoline and naphtha markets are still in backwardation. There is no sign of improvement in demand,” a second Chinese trader said.

Intermonth spread between October and November for gasoline was at a backwardation of about $3/bbl on Thursday, indicating poor outlook for forward months, traders said.

MTBE is used as an additive to boost octane levels in gasoline.

“[MTBE] prices may just fall below the $1,100/tonne [FOB Singapore] in near future,” another trader based in Singapore said.

($1 = €0.77)


Author: Ong Sheau Ling



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