MTBE Market in China Faces Downtrend Amidst Supply Surplus

In June 2024, the MTBE (Methyl Tert-Butyl Ether) market in China encountered bearish sentiments, leading to a significant downtrend and lowered prices. This decline was primarily driven by high operating rates in Methanol production, reducing production costs, and sluggish downstream demand from the gasoline sector.

MTBE prices decreased by 4.1% compared to May 2024, settling at USD 930/MT FOB Dalian, China. The revival of idle production capacities during this period, including facilities like Qixiang Tengda and Maoming Shihua, contributed to supply outpacing demand. Despite these restarts, operating rates remained cautious, indicating ample existing stockpiles.

The oversupply situation was exacerbated by increased Methanol production from major enterprises, a key feedstock for MTBE, which further lowered production costs. Weak demand from downstream industries, particularly in gasoline production, contributed to limited market enthusiasm. Downstream users adopted a conservative purchasing approach, limiting transactions to essential restocking needs.

Internationally, declining crude oil prices also impacted the refined oil market, including gasoline, reducing the need for MTBE as a gasoline additive. Refineries focused on stimulating gasoline sales amidst economic uncertainties but did not translate into increased MTBE purchases.

Looking ahead, the MTBE market in China is anticipated to continue its downtrend into July 2024, driven by persistently low gasoline demand and potential future supply increases in the global oil market. Industry stakeholders are advised to monitor these dynamics closely for strategic adjustments amidst evolving market conditions.

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