SINGAPORE (ICIS)--China’s domestic methyl tertiary butyl ether (MTBE) prices may rise further this week, driven by strong restocking demand and limited spot supply.
On 12 January, spot prices in south China were assessed at Chinese yuan (CNY) 5,950-6,250/tonne ($921-967/tonne), up by an average of CNY175/tonne from the previous week, according to ICIS data.
Prices of blended gasoline in the region, meanwhile, gained CNY400/tonne over the same period to CNY6,300-6,700/tonne, the data showed.
Gasoline prices are also being buoyed up as the Chinese government is expected to adopt more stringent measures to address consumption tax evasion by March 2018, industry sources said.
Some traders and refiners are holding off sales of MTBE cargoes, expecting prices to rise further along with gasoline.
Meanwhile, inventories at domestic refiners are below comfortable levels, with Chinese MTBE plants running at an average rate of just above 50%.
In the week ended 12 January, the average operating rate of MTBE plants in the country stood at around 54%, slightly up up from the previous week as Shenchi Chemical ramped up production at its 400,000 tonne/year MTBE unit in Shandong.
Gasoline blenders, meanwhile, have started to build inventories ahead of the Chinese Lunar New Year holiday in late February.
Robust upstream crude market will also lend some support to domestic MTBE prices in the near term.
($1 = CNY6.46)
Picture: A fuel pump. Methyl tertiary butyl ether (MTBE) is used in gasoline blending in China. (Source: REX/Shutterstock)