SunSirs: China MTBE Market Continues to Decline

https://www.chemnet.com   Jun 11,2024 SunSirs

The domestic MTBE market has experienced a narrow decline. From May 31 to June 7, the price of MTBE dropped from 6,812 RMB/ton to 6,690 RMB/ton, with a price drop of 1.80% during the cycle, a month on month decrease of 8.04%, and a year-on-year decrease of 9.59%. The international crude oil trend is not good, with a significant decline. The gasoline market is operating weakly, and businesses are not actively purchasing related gasoline raw materials. MTBE resource supply continues to be abundant, and in a state of supply-demand imbalance, MTBE prices have fallen to a low level.

On the cost side, in terms of crude oil: International oil prices have fallen, with the main bearish factors being the gradual cancellation of voluntary production cuts by OPEC+starting from October, which has raised market concerns about future supply growth and an increase in US gasoline inventories. As of June 6th, the settlement price of Brent crude oil futures main contract was $79.87 per barrel.

Demand side: In terms of gasoline, the decline in international crude oil prices has affected the oil market, resulting in a weak and downward trend in the refined oil market. Refineries are reducing prices and promoting sales, while intermediaries are more wait-and-see. A few downstream users just need to restock, and market transactions are mainly small orders. Short term MTBE demand is influenced by bearish factors.

Supply side: Qixiang Tengda and Maoming Shihua units resumed work over the weekend, with an overall low operating rate but a slight increase compared to the previous cycle. Short term domestic MTBE supply is affected by bearish factors.

In the future market, it is predicted that the early maintenance equipment will start construction one after another. In terms of downstream gasoline demand, the Dragon Boat Festival holiday will provide a certain positive boost to demand. Under the contradiction of supply and demand, MTBE analysts from SunSirs believe that the domestic MTBE market may continue to be weak in the short term.

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