MTBE FOB China prices hit over seven-month high as sellers look to the west

Prices for MTBE loading from China reached a more than seven-month high Feb. 4, supported by healthy buying interest from arbitrage markets despite weak sentiment in the nearby Straits region, according to Platts assessments and Asia-based traders, brokers and producers.

Platts, part of S&P Global Energy, assessed MTBE FOB China at $650/metric ton on Feb. 4, up $10/mt day over day, marking the highest level since June 23, 2025, when the marker was assessed at $678/mt.

Sellers were eager to move their production as active buying interest from arbitrage markets like Europe and Latin America continues to absorb Chinese MTBE, a Singapore-based trader said.

"They [Chinese MTBE producers] just want to sell at high prices and see how buyers respond. If buyers are willing to pay more, then why sell at a lower price?" the trader added.

Over December-January, several MR tankers of up to 40,000 mt of MTBE were redirected to distant regions such as Europe and Latin America as regional buying interest weakened, according to market sources.

On Feb. 4, a Latin American buy tender was heard floated for an MR-sized MTBE cargo loading from China in late March. According to two Chinese producers, the tender was awarded to a state-owned company at about $650-$660/mt, although this information could not be independently verified.

A second Singapore-based trader said that although the price seemed high, the tender deal was possible because the Straits region might not be able to afford that price level, adding, "So [sending it] to South America makes sense."

Meanwhile, the focus is shifting to the European summer driving season, with the aim of directing April-loading cargoes toward that market, a third Chinese producer said.

"For now, we may prefer to quote MR cargoes for April to secure better prices, as demand is expected to be stronger then," the producer added.

Chinese MTBE inventories were "very low," and producers might not be in a hurry to sell, a fourth Chinese producer said.

A broker in China said production and sales in the Shandong region rose to about 125% on Feb. 4, which could be another factor supporting higher spot prices.

"Stockpiling before the Lunar New Year holidays," the broker added, referring to the surge in demand for Shandong-produced MTBE observed on that day.

The higher production and sales levels clearly indicated that producers in the region were increasing their operating rates, a third Singapore-based trader said.

"Production and sales levels were about 55%-60% when prices were at about $620/mt," the trader added.

Volatile crude

While prices for MTBE FOB China cargoes rose, prices for cargoes loading from the Straits benefited from a jump in upstream crude oil prices despite soft demand in the region, according to traders.

Platts assessed MTBE FOB Singapore up $15.48/mt day over day at $655.59/mt on Feb. 4.

Crude oil futures edged up Feb. 4 as US-Iran tensions escalated following the US shooting down an Iranian drone near a US aircraft carrier, coupled with US Energy Information Administration data showing a draw-down in US weekly crude inventories.

However, despite the rise in Straits-loading MTBE cargo prices driven by higher crude oil values, overall demand in Southeast Asia appeared subdued.

"It is super bearish here in the Straits region, [as] gasoline inventories are high, so there is not much blending happening at the moment," a fourth Singapore-based trader said.

Domestic demand

Chinese MTBE producers were relying on sustained deepsea demand as the domestic blending market continued to shrink, a fifth Singapore-based trader said.

"I think MTBE demand in the domestic Chinese market has been declining, along with a 5% drop in gasoline demand," the trader said.

Chinese producers were struggling with excess supplies, further exacerbated by weak buying interest, especially within China, the third Chinese producer said.

"There are no margins yet, [but] there are so many MTBE plants. As a result, Chinese MTBE prices are now [among] the lowest globally," the producer said.