The atmosphere has eased; MTBE prices remain on a downward trend regionally (20151013)

Despite an oversupply of oil globally, OPEC continues to increase crude oil production in order to maintain its market share. Traders have taken profits from 11-week highs, causing crude oil futures in Europe and the United States to drop by 5%. The sharp decline in international oil prices has further fueled pessimistic expectations among market participants. Today, the buying and selling atmosphere in the MTBE market remains weak, with manufacturers continuing to reduce their selling prices on a regional basis. In the Shandong region, today’s mainstream price for MTBE in the market is between 5,600 and 5,700 yuan per ton, with room for negotiation regarding actual transaction prices. As the downstream replenishment cycle comes to an end, the buying and selling atmosphere in the oil market continues to weaken. Coupled with today’s sharp drop in international oil prices, which has further heightened the pessimistic outlook among market participants, MTBE manufacturers continued to adopt price-cutting promotional tactics today. In the East China region, despite a downward trend in surrounding markets, manufacturers have chosen to remain cautious and wait and see due to an ongoing shortage of MTBE in local supply. Currently, the prevailing transaction prices in Jiangsu and Zhejiang are between 5,850 and 5,900 yuan per ton, while in Anhui they are around 5,600 yuan per ton.

Overview of raw material and downstream product markets: Methanol: Today, there is a limited supply of methanol in the southern part of Shandong. With normal purchases of olefins in the region, trading activity remains satisfactory, and no significant adjustments have been observed at present. The retail ex-plant prices offered by local manufacturers remain around 2,050 yuan per ton; a few key manufacturers have set fixed prices without allowing any changes ； In the central and northern regions, the methanol market continued to show upward trends, with prices rising by 20–30 yuan per ton. Currently, there is a limited supply of goods in these areas, and the volume of goods available at higher prices is moderate. The mainstream price for local enterprises has risen to 2,000–2,030 yuan per ton in cash terms. Feed gas: Today, the prevailing transaction price for domestic gas in Shandong is 3,600–3,700 yuan per ton, while the prevailing transaction price for carbon tetra compounds after etherification is 4,350–4,450 yuan per ton. The market price of liquefied gas in Shandong is showing a downward trend, with fairly decent results; most sellers do not face significant inventory pressures. If there are no negative factors tomorrow, it is likely that prices will remain stable. Gasoline market: The sharp drop in crude oil prices has increased caution in the market. However, with a focus on reducing losses and stabilizing the market, there is a strong tendency to maintain stable prices, driven by upward expectations. As a result, the gasoline market conditions in Beijing and East China remain relatively stable. In Shandong and North China, however, adverse news has led some manufacturers to reduce prices; meanwhile, the prices of MTBE and alkylation oil, which are used as raw materials for blended gasoline, have also declined slightly. Overall, purchasing and selling activities remain relatively stable.

Outlook for MTBE in the future: As the downstream replenishment cycle comes to an end, there is a expectation that purchasing interest in the downstream market will continue to decline. Additionally, given that the operating rate of MTBE production facilities remains high, manufacturers are concerned about an increase in supply in the future, which leads them to be inclined to sell their products actively; it is not ruled out that manufacturers may resort to price cuts as a promotional tactic.