China MTBE Market Deserves More Attention

From mid-November, the demand for MTBE from gasoline market was weak due to the decline in the orders from state-owned refineries. Most traders purchased resources on a need-to basis, resulting in the tough sales for MTBE, alkylated oil and other raw materials of gasoline.

As the operating rates of MTBE units were high, the supply of MTBE was ample. Producers suffered great inventory pressure in response to the tough sales, and most producers had to cut the MTBE prices in order to promote sales.

Meanwhile, the price of MTBE feedstock was high, resulting in the profit losses of MTBE units. Taking the isomerization units in Shandong as an example: The ex-work price of high-olefin C4 in Northwest China is RMB 5,100/mt, and the high-olefin C4 price in Shandong is RMB 5,800/mt. Meanwhile, the methanol price is about RMB 3,140/mt in response to the tight supply.

Calculated by the current prices, the isomerization units in Shandong will suffer the profit loss of RMB 270/mt when 1 mt of MTBE is produced. Moreover, the iso-butane dehydrogenation units suffer greater profit losses.

At present, the iso-butane price in Shandong is around RMB 5,200/mt, but the mainstream dealing price of MTBE is RMB 5,500/mt or so. Calculated by these prices, the iso-butane dehydrogenation producers will suffer the profit loss of RMB 670/mt when 1 mt of MTBE is produced.