TPC cuts MTBE production as market sees weaker product margins

Houston — TPC has temporarily suspended production of MTBE volumes at its Houston facility, a company source told S&P Global Platts on Thursday.

The facility, which produces about 10,000 b/d of MTBE, began cutting rates as MTBE product margins weakened around late March/early April. The facility is expected to return to normal MTBE production rates once feedstock prices improve, including those for isobutane and methanol, according to the source.

Although methanol prices have weakened 40 cents/gal since the start of March, the price spread between domestic MTBE and methanol has flipped from an average of plus 27.6 cents/gal in March to an average of negative 1.3 cents/gal so far in April, Platts data shows.

If the trend of negative price spreads continues, the regional market could see additional production cuts for MTBE, with two additional producers heard to have already scaled back production as well.