Asian MTBE spread to physical 92 RON gasoline reaches 7-month high

Asian MTBE closed at a premium of $2.20/b to physical 92 RON gasoline on Jan. 8, marking one of the highest levels in seven months, according to Platts data, part of S&P Global Energy. This was surpassed only by the previous close on Jan. 7 at $2.32/b. The MTBE differential last recorded higher at $3.45/b on June 12, 2025, before trading at a discount to the physical marker.

The rise in the MTBE differential at the start of 2026 was attributed to reduced MTBE production rates in China, with a Singapore-based trader suggesting that "all the factories [were] preparing for Lunar New Year."

Meanwhile, crude oil futures were trending lower, driven by geopolitical events in Venezuela, which heightened concerns about global oversupply. These factors have pressured the profit margins of Chinese MTBE producers, leading to reduced operating rates. "They cannot sustain operations with these prices," the same trader said.

Arbitrage between China and the Straits was reportedly closed, with selling indications in China heard at $610-$620/mt for prompt cargoes, levels considered too high for Straits market participants. "FOB China prices need to come off," said another regional trader. A major MTBE producer in China confirmed that cargoes could not be sent to Singapore.

MTBE supply tightness was heard in the Straits, further supporting the higher MTBE premium to physical 92 RON gasoline and Platts Singapore 92 RON gasoline swaps. Spot trading liquidity remained limited amid softer Mean of Platts Singapore MTBE prices, with a Singapore-based trading manager noting that few participants were willing to sell at current price levels.