For the First Quarter of 2022
In February of the first quarter of 2022, South Korea ceased supplies of MTBE to Russia, joining the United States and the European Union in distancing itself from Moscow following the invasion of Ukraine. Due to shifting energy prices, the Asian market remained unpredictable, and a number of manufacturers contemplated reducing production rates due to the high cost of feedstock Methanol. In February, MTBE prices in India were 1,474 USD/MT. In February and March, major manufacturers of MTBE shut down their facilities for maintenance, which further pushed up costs. In March 2022, the arbitrage window for moving MTBE from China to Singapore has increased significantly due to the price increase in Singapore.
In the first quarter of 2022, the market remained solid despite an exceptional increase in crude oil prices compared to the previous quarter. The insufficiency of transportation and manpower throughout the region hampered regional distribution due to logistical challenges. In the final week of March, costs began to decline as a result of ample supply and weak market demand. The price of the chemical in Germany increased by 2% in the first quarter compared to the previous quarter. The Russia-Ukraine war is believed to be the primary cause of the European MTBE market's extreme volatility.
In the first quarter of 2022, MTBE prices increased due to supply constraints and solid demand from downstream consumers. In the second part of the quarter, escalating tensions between Russia and Ukraine exacerbated the gasoline shortfall in the downstream industries. Due to the increase in operating costs, downstream gasoline prices increased dramatically as a result of a large plant turnaround in the second part of the quarter affecting output units. In the United States, the price of the chemical increased as a result of a rise in the cost of natural gas as a result of intensifying international sanctions on Russia. Comparing the first quarter to the previous quarter, the price of the chemical on the domestic market increased by 3%.
For the Fourth Quarter of 2021
Comparing the fourth quarter of 2021 to the previous three quarters, it was noted that MTBE prices increased in Asia. In late October, MTBE prices were sustained by robust values of upstream oil and robust demand from the pharmaceutical business. The demand for the chemical in India remained consistent, and as a result, there was only a slight fluctuation in pricing. According to the statistics, MTBE commerce was small during the previous month, but there were numerous imports from Israel at about the same price. In the last week of December, MTBE prices in India reached an all-time high, fluctuating between 1,475 USD/MT Ex-Bhiwandi and 1,555 USD/MT Ex-Bhiwandi for the Pharma Grade. The market on the Indian subcontinent mirrored the worldwide MTBE market, where market dynamics worsened towards the end of the year. Demand also witnessed a period of consumption stagnation due to the pharma sector's demand growth reaching a plateau.
Comparing Q2 and Q3, the price of the chemical in the European market increased significantly in Q4. This tendency was the outcome of an increase in methanol and acetic acid as well as a good trade environment. The demand in Germany and Belgium remained robust, with the downstream sector driving demand growth. As the year drew to a close, however, gasoline remained weak against naphtha, making it less profitable for gasoline blenders to use naphtha as a blending component and reducing the need for octane boosters such as MTBE. Additionally, the impending New Year had a negative impact on the industries, resulting in a decrease in demand and an increase in inventories.
In the fourth quarter of 2021, MTBE prices in the United States rose relative to the previous quarter. In November, prices were reported to be hanging between 898 USD/MT FOB USGC and 956 USD/MT FOB USGC, which was the highest point. With the advent of the New Year and the increase of new Omicron cases in the last week of December, the market saw a modest decline in price, but remained robust. The price was sustained by a lack of coal and an increase in the cost of methanol and isobutylene. Weak trade activity and enough product supply towards the end of the year led to a low pricing.
For First, Second and Third Quarters of 2021
The Asian MTBE market remained substantially limited during Q1 2021. The demand from the gasoline blending industry increased, due to the return of industrial and commercial operations in the region. The consistent usage pushed up the regional MTBE prices in first half of the quarter. Moreover, globally low upstream supplies in February influenced the prices by a large proportion. In India MTBE offtakes were drastically curtailed in the beginning part of the second quarter. Demand remained constant in China as the introduction of consumption tax in mid-June by the Chinese government maintained the MTBE pricing trend. Hence the Asian blenders took a conservative strategy to obtain significant amounts of MTBE. The gasoline blending demand in China and Malaysia remained tight while domestic inventories in South Korea showed a growth in Q2. With the restoration of industrial and commercial operations in Asia-Pacific during the third quarter of 2021, demand in the region had a good resuscitation. In India, offtakes climbed significantly during this quarter, while prices stabilized after seeing a steady decline during the previous quarter.
During the first quarter of 2021, supplies were curtailed in the European area, as numerous plants were working at decreased efficiency owing to the extreme cold weather in the Northwest European region. Furthermore, the domestic consumption fell owing to lockdown in significant areas of the region, which resulted in lower demand from the downstream gasoline blenders. Imports further declined as a key factory from the Middle East ceased its turnaround in the second quarter. Constant offtakes from the pharmaceuticals industry substantially increased the MTBE demand in Europe. FOB ARA (Amsterdam-Rotterdam-Antwerp) bids were estimated about 687 USD/MT in the first half of the quarter.
MTBE supplies in the North American area were scarce, during the first quarter of 2021. However, the demand started a rapid increase despite the low supply scenario, thereby resulting in fewer shipments to other areas in Q1 2021. MTBE prices in the US increased by 75 USD/MT to 670 USD/MT in FOB New York. During the second quarter of 2021, FOB Texas MTBE offers in May were traded at 680 USD/MT, drawing cues from the improving market sentiments amidst the mass vaccination drive and boosted the offtakes from the gasoline blending industry. In the beginning of the third quarter of 2021, MTBE prices decreased.
For the Year 2020
The supply of MTBE in the Southeast Asian market remained inconsistent as a result of a number of plant shutdowns and restarts. Towards the end of September, S-Oil of Korea was reportedly doing a maintenance turnaround at its MTBE facility, while Chandra Asri of Indonesia launched its plant in early September. The supply difficulties were worsened by the shutdown of Taiwan's Formosa plant in the second part of the third quarter owing to a fire risk at its upstream facilities. As a result of the global pandemic's effect on oil consumption, there was a continued lack of demand. Reduced differential between derivative 92 RON gasoline and MTBE reflected its decreased utilization on the regional petrochemical market, which therefore had a direct influence on its costs. Since the emergence of Coronavirus, the demand for pharma-grade MTBE has led to a significant increase in price. In accordance with the market perspective, the price of MTBE Pharma grade in India had a continual increase and was estimated at 1,250 USD/MT.
Europe's supply fundamentals were significantly facilitated by the easing of containment restrictions across the continent. From July to September, operating rates increased in tandem with the restoration of robust market activity. Peak demand season in the European region supported the resuscitation in consumption of methanol-based fuel oxygenate along the nations of the Mediterranean region, such as Spain, Greece, and Italy. Even after the reappearance of Coronavirus in a number of regions, the MTBE market remained balanced due to strong seasonal demand.
Beginning in the first quarter of 2020 and continuing into the third quarter of 2020, supply shortages persisted as a result of the devastating effects of hurricanes in the Gulf Coast area of the United States. The region's export potential decreased in comparison to the previous fiscal year as a result of a decline in the use of petrochemical products owing to the spread of Covid-19. However, consumption of MTBE increased compared to the preceding quarter, as several nations resumed market activity with relative ease in response to Covid-19 control efforts. Overall, the market in the United States experienced a decline due to the fact that a significant portion of domestic output is devoted to meeting international demand.
Procurement Resource provides latest prices of MTBE (Methyl Tert-Butyl Ether). Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.
Procurement Resource provides prices of MTBE for several regions around the globe, which are as follows:
MTBE or Methyl Tert-Butyl Ether is basically a colourless liquid with a distinctive anaesthetic-like odour. Its vapours are heavier than air. Its boiling point is about 131°F while its flash point is about 18°F. It is also less dense than water and soluble in it. It belongs to the group of chemicals commonly known as oxygenates that increase the oxygen content of gasoline. It is utilised as an octane booster in gasoline.
Chemical Formula of MTBE:
MTBE is produced from raffinate-1 and methanol using etherification process, which is initially carried out in a conventional reactor and then in a reactive distillation column. This results in the formation of MTBE.
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The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).
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