China MTBE may retreat as gasoline demand softens

SINGAPORE (ICIS)–China’s domestic methyl tertiary butyl ether (MTBE) prices may retreat this week on expectations of reduced gasoline demand from state-owned refiners and increased supply.

In the week ended 4 May, spot MTBE prices in south China gained yuan (CNY) 75/tonne ($18/tonne) from one week before to CNY6200-6400/tonne ex-tank, according to ICIS data.

State-owned refiners have shown weaker buying interest in blended gasoline going into May in view of high inventory levels.

Gasoline blenders stood on the sideline and cut blendstock purchases as a result.

Moreover, MTBE spot availability in northeast China have increased as several producers resumed stable operation following output disruptions caused by feedstock supply tightness.

Last week, post-holiday replenishing demand and strong blended gasoline market had boosted MTBE prices.

Blended gasoline prices in south China rose to CNY7,230/tonne on 4 May from CNY7,130/tonne on 27 April, ICIS data showed.

China was on holiday during 29 April-1 May for Labour Day celebration.

The average operating rate at domestic refiners stayed at around 52.6% in the week of 4 May, with their MTBE inventories still below comfortable levels.

($1 = CNY6.36)

Picture: Around 95% of methyl tertiary butyl ether (MTBE) produced is used as an octane booster in gasoline.

ICN