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NWE MTBE factor at 10-week low on weaker exports, non-oxy gasoline demand
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      The Northwest Europe MTBE factor, the relative price of MTBE to gasoline, fell Thursday to its lowest level since November 21, 2012 on weakened export demand and a switch in focus to non-oxygenated gasoline blends, according to industry sources.

      Spot MTBE was assessed at $1,256/mt FOB ARA Thursday, or at a 1.184 factor to spot European gasoline. MTBE, or methyl tertiary butyl ether, is a fuel additive widely used in Europe to boost the gasoline octane number and ensure it burns more efficiently.

      The MTBE factor stood at around 1.39-1.43 at the end of December and start of January on the heels of relentless demand from South American buyers and tight supply in the US Gulf market.

      South American countries typically source MTBE from the US Gulf region. However, supply in the US Gulf dried up at the end of December and beginning of January following the shutdown of Enterprise Product Partner’s MTBE production unit in Mont Belvieu, Texas. The MTBE factor began to weaken from January 4 following the restart of the EPP unit, which curbed demand for European export shipments, according to sources.

      Meanwhile, strong gasoline export markets in the US and West Africa led to a further reduction in MTBE demand, since the US does not allow the use of MTBE and blending economics for West Africa typically favor other gasoline components.

      “I think MTBE is cheap compared to reformate, but then blenders might prefer to export non-oxy gasoline instead of blending European quality,” a source said.

      While demand was weaker, one trader described the current MTBE market as well supplied, saying there is product “all over the place.” A second trader said there’s “a lot of MTBE coming [into Northwest Europe] and it seems nobody really wants it.” (Source: Internet)

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