The Methyl tertiary butyl ether (MTBE) markets are covered both weekly and daily by ICIS in Asia, Europe and the US. These up-to-date, reliable and informative reports provide vital, unbiased updates to those involved with the industry and allows players to make confident and informed business decisions.
The weekly reports contain spot price assessments for this gasoline blending component over the week and at close of business Friday. Market commentary gives details of deals taking place, domestic news, gasoline updates and graphs. The daily reports focus on price assessments for MTBE, gasoline and related market quotations, with an overview of the day’s activity.
Updated to Q2 2020
Supply from the Middle East region saw some reduction, as a producer halted production amid shrinking margins. However, the lost volume was compensated by incoming arbitrage volumes from EU and US, where the markets were worse hit by the coronavirus pandemic. Supply from Singapore also increased as traders actively sold cargoes for immediate loading in order to minimise inventory losses due to the oil price crash. Chinese producers’ gross operating rate was at below 50% level, amid a huge reduction in gasoline blending demand.
Demand in southeast Asia was poor, as the gasoline blending sector completely halted in April and May amid coronavirus-related lockdowns. Gasoline prices collapsed, eroding profit margins for blenders. As international prices hit historical lows, import demand from China surged, as the MTBE prices in China did not see as steep a fall. As a result, China contributed to 70-80% of the consumption in Q2. MTBE demand for MMA production somewhat improved due to increased need for medical supplies made from PMMA sheets.
Supply was reduced significantly in line with a fall in buying interest caused by the demand destruction due to the coronavirus outbreak. Volumes of the methanol-based fuel oxygenate were stored in facilities across the region, including in Finland and in the ARA region. Supply began to improve at the end of May. Producers with dual production capacities continued to favour MTBE over ETBE production due to higher profit margins.
The virus pandemic caused road transport to come to a standstill in Q2, with gasoline components such as MTBE facing a drastic fall in demand. Italy and Spain saw buying interest sink due to the high number of infection cases and deaths. Despite a steady recovery of demand at the end of May, year-on-year demand remained low due to the impacts of the virus.
Supplies of US MTBE tightened up in early Q2 as production rates declined in the US following the crude oil collapse and weakened consumption of the product. Over the quarter, production was noted as resuming to higher levels as gasoline prices and demand from Mexico lifted. The US exists as an export market for MTBE with little-to-no consumption domestically. In the first part of Q3, about 40% less MTBE was exported compared with the same months in 2019.
US MTBE demand dropped off following the collapse of crude oil and energy markets. Prices plummeted in Q2 along with gasoline and the overall energy complex. Demand from Mexico, the primary importer of US material, declined as the country had its own lockdown measures implemented. Some cargoes were seen going to Asia to help fill in the gap in demand left by Mexico during the quarter.
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Around 95% of MTBE produced is used as an octane booster and oxygenate in gasoline.
Methyl tertiary butyl ether (MTBE) is a colourless, flammable liquid with a characteristic ether odour. It is soluble in water, alcohol and ether and unstable in acidic solutions. MTBE is highly flammable and can form peroxides on storage.
Around 95% of MTBE produced has been used as an octane booster and as a oxygenate in gasoline. One of its major advantages is its good blending properties and for increasing the octane levels of lead-free gasoline.
MTBE can also be used to make high-purity isobutylene, which can be further processed to make butyl rubber, highly reactive polyisobutylene, methyl methacrylate (MMA) and other smaller derivatives.
MTBE is also used as a solvent and extractant.