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 Q3 2020
Supply indicators were mixed on plant start-ups and maintenance shutdowns. In July, Korea’s S-Oil shut its RFCC and MTBE unit for maintenance. In August, Taiwan’s Formosa shut down its MTBE unit due to a fire at its upstream facility. At end-August to early September, Indonesia’s Chandra Asri started up its MTBE unit as planned. In September, Korea’s S-Oil shut down its MTBE unit again for maintenance.
Demand stayed weak due to lacklustre demand in the oil products market. The coronavirus-hit world economy led to reduced oil consumption despite Q3 being a conventional peak season. This was reflected by a low ratio between the MTBE price and its derivative 92 RON gasoline price. Furthermore, gasoline blenders had no incentive to use MTBE to blend because blending activity was reduced when another key component, naphtha, was deemed expensive.
Supply improved in line with demand recovery brought on by easing lockdown measures across Europe over the summer. Production levels were still low at the beginning of July but increased by the end of Q3. Producers with dual production capacities continued to favour MTBE over ETBE production due to higher profit margins. MTBE production margins fared significantly better than the ethanol-based ETBE due to low methanol prices.
Buying interest for the methanol-based fuel oxygenate continued to be driven by countries along the Mediterranean region such as Italy, Spain, and Greece. Consumption improved steadily over Q3 due to lifting of lockdowns, coinciding with the peak summer driving season. Narrowing gasoline and naphtha cracks impacted blending economics and suppressed spot trades. The market remained balanced amid the summer driving season and was largely unaffected by the mid-quarter resurgence of coronavirus cases across Europe.
Supply was shortened from early 2020 into Q3 after an unusually active Atlantic hurricane season took down production of one major producer in the US Gulf Coast region. Exports overall weakened compared to a pre-pandemic 2019 when countries were taking in more product. The US is predominantly an export market with little to no consumption of MTBE domestically.
Demand for US-produced MTBE, which is chiefly exported to international markets, was stronger in Q3 as export destination countries reopened, taking in more product. MTBE is added to gasoline to boost octane levels. Mexico remained the top destination for the oxygenate, despite a national health emergency declared by the country’s government in late March.
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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.