China MTBE Export Arbitrage Greatly Increased

In July, the mainstream MTBE dealing prices in Shandong hovered at RMB 5,600-5,650/mt. Meanwhile, the MTBE prices in Singapore obviously increased, and the yuan devalued recently. With the approach of the end of July, the MTBE export arbitrage greatly rose.

In July, the mainstream MTBE dealing prices in Shandong hovered at RMB 5,600-5,650/mt. On the one hand, the overall demand for MTBE from the gasoline market was sluggish. Moreover, many units in Shandong took overhauls, so the demand for MTBE kept dipping. On the other hand, the low-priced MTBE resources in other regions curbed the MTBE sales in Shandong. Therefore, it was tough for traders to raise the MTBE prices. Meanwhile, as the iso-butane prices went up, the iso-butane dehydrogenation units in Shandong suffered great profit losses. The profits at mixed alkane dehydrogenation producers were average. On the whole, it was tough for MTBE producers to operate, so the MTBE prices were largely stable in July.

Up to July 26, the average price of high-purified MTBE was RMB 5,650/mt, and the export cost was about $727/mt (deducting 16% of VAT and 15% drawback), which was $66/mt lower than FOB Singapore. As export arbitrage of MTBE is relatively high, China’s MTBE producers will show stronger interest in exporting MTBE.