Updated to mid-November 2009
Asian market review by Heng Hui, ICIS pricing
Asian methyl tertiary butyl ether (MTBE) prices started high at $815-825/tonne CFR (cost and freight) China and $780-790/tonne CFR Singapore in mid-August, buoyed by firm crude and gasoline prices and limited supplies in the region. Firm demand and pricing in Europe had drawn Middle Eastern cargoes away from Asia.
Prices dipped from mid-August onward to $745-755/tonne CFR China due to poor demand from the key China market during the Chinese National holidays in early October, before rebounding to above $810/tonne CFR China in early November. Imports to Singapore similarly dropped to $710-720/tonne CFR Singapore in early October before rebounding to around the $780/tonne CFR Singapore level by early November.
Exports out of Singapore decreased from $770-780/tonne FOB (free on board) Singapore in mid-August to $700-710/tonne FOB Singapore, due to decreased demand from the Chinese and tumbling crude and gasoline prices before increasing again to $765-770/tonne FOB Singapore by early November.
The end of the driving season in October had seen Middle Eastern players targeting Asia, particularly China due to the higher demand and relative pricing versus northwest Europe (NW Europe). The tight supply situation in Asia appeared to have eased a little but MTBE prices surged again supported by firmer crude and gasoline prices.
European market review by Matthew Bristow, ICIS pricing
The European MTBE market was tight in the first half of Q4, and the factor against gasoline was above 1.40 on some days as tenders to Venezuela sucked material out of the European market.
High prices pulled in imports from the Arabian Gulf and elsewhere, yet the market remained tight, and the factor against gasoline continued to be above blend value.
Towards mid-November there was interest from sellers wishing to take advantage of current high prices before the market tightness recedes and weak winter demand pulls prices lower, while other market players believed that a Turkish tender would keep the market tight.
Huntsman’s turnaround at its MTBE unit at Port Neches, US, in early January, is expected to tighten the European market throughout Q1, and possibly open another Venezuelan tender.
US market review by Steven McGinn, ICIS pricing
MTBE prices increased in the US during the third-quarter on rising feedstock methanol and butane prices combined with short supply.
Methanol contract prices rose from mid-80 cents/gal in September to 100-101 cents/gal for November.
US producer LyondellBasell switched over production of MTBE to ethyl tertiary butyl ether (ETBE) at its Channelview, Texas plant, effectively removing close to 32,000 bbl/day of MTBE production capacity.
Huntsman confirmed that it will take down its Port Neches, Texas plant in January 2010, which will add to the supply squeeze.
Demand for the gasoline additive remained consistently high across the globe, especially in Latin American countries.
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Methyl tertiary butyl ether
Uses and Outlook
Over 90% of methyl tertiary butyl ether (MTBE) production has been used in gasoline as an octane booster and oxygenate. MTBE has been favoured over ethanol because of its transportability, superior performance in reducing benzene and formaldehyde in gasoline, and its lower volatile organic compound content.
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Methyl tertiary butyl ether
Process Technologies
Methyl tertiary butyl ether (MTBE) is produced by reacting isobutene with methanol over a catalyst bed. The isobutene can be obtained from a number sources: a C4 stream from a steam cracker with the butadiene removed (know as Raffinate-1 which is a mixture of isobutene and 1- and 2-butenes); butene-butane fractions from a catalytic cracker; and n-butane (from LPG) which is isomerised to isobutane and then dehydrogenated to isobutene. Lyondell (Arco) derives isobutene from the dehydration of t-butyl alcohol which is coproduced in its propylene oxide process.
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