Platts Chemical Trends H1 2026
Platts Chemical Trends H1 2026
MTBE, Toluene and MX
Asia-driven supply to continue to dominate global gasoline blendstocks
- China's MTBE overcapacity to weigh on markets
- Toluene exports to US, Europe to continue
Global MTBE prices are expected to face downward pressure through the first half of 2026 as the market braces for the impact of overcapacity in Asia.
Throughout 2025, many production plants in China struggled with low profit margins or outright losses, yet new installations are still on the horizon. Notably, Zhenhua Petrochemical Co. Ltd. is set to launch a new 660,000 mt/year MTBE plant in 2026, and Sinopec Zhongyuan Petrochemical Co. Ltd. plans to bring an additional 600,000 mt/year online in the same year.
Domestic blending demand in China has not shown significant improvement, largely due to the ongoing shift toward cleaner energy alternatives. Consequently, the MTBE FOB China marker hovered between $620-$640/mt from September to November 2025, down from $665-$725/mt during the same period in 2024, according to S&P Global Energy Platts data. While some market participants remain optimistic that FOB China prices will stabilize with support from increased exports to the EU and South America, there is an overarching concern of overcapacity.
As the situation in China unfolds, its ramifications are already being felt in the European MTBE market. In the first half of 2026, European traders are preparing for an influx of MTBE from China, with vessels already being directed toward Chinese sellers for early-year deliveries.
An Asian seller highlighted that Asia's expanding MTBE capacity, coupled with Europe's status as a key export outlet, suggests a more consistent pattern of arrivals in 2026. However, demand in Europe is expected to remain flat during this period, with a notable shift toward ETBE consumption in certain markets, particularly Italy, driven by increased biofuel mandates. This shift could further dampen the appetite for MTBE, compounding the pressure on prices.
US MTBE participants also anticipate heightened competition from Asian MTBE exports into Latin America, making it challenging for Gulf Coast participants to remain competitive. Still, US exporters are expected to continue sending product to Mexico, where most US MTBE exports typically go.
"The Gulf Coast MTBE market will largely depend on Mexico's demand," a sell-side source noted.
Through August 2025, US MTBE exports to Mexico totaled 1.115 million mt, accounting for approximately 84% of the total US MTBE exports, according to the US International Trade Commission.
Asia toluene, MX exports to continue despite sanctions
Asia-origin toluene and mixed xylenes are expected to dominate the market in 2026. In China, market sources anticipate that gasoline demand will continue to decline, resulting in increased aromatic availability. Several Asian producers are optimistic about the arbitrage to Europe due to favorable spreads, and there's significant interest in exporting South Korean toluene to the US, where prices are over $200/mt higher.
“Western Europe could see a toluene shortage because of a cracker closure in Italy, a pipeline leak at a German refinery that could take a year to fix and persisting mechanical issues at the Dangote refinery supporting gasoline exports to Western Africa," said Michel Molinier, S&P Global Energy CERA analyst.
US blenders are already looking at Q1 arrivals, which could result in significant early-year volume movements, especially as some South Korean producers plan to turn off their STDP units in January, increasing export availability.
In India, the toluene market is tight, partly due to US sanctions on several Indian entities, which have led to sellers altering their payment terms. Tariffs could hinder the flow of South Korean supply but may also open the door for cargoes from China, with several already booked for December and January. Despite expectations of stable Indian demand in H1 2026, lower inventory levels are likely to keep prices elevated, as India's dependency on imported toluene remains significant at around 45,000 mt/month.
Shandong Yulong's new 3 million mt/year plant is expected to bolster isomer-MX supply in China, primarily selling its MX to PX producers until it starts PX production at its Yantai facility by the end of 2026, Molinier said.
On both sides of the Atlantic, blending will be the main outlet for toluene and MX as chemical demand is anticipated to remain weak for most of 2026, Molinier said.
“In the US, a stronger gasoline demand is forecasted in 2026, partly due to the slower-than-expected ramp-up of Dos Bocas and Dangote refineries, anticipated interest rate cuts, lower inflation, and improved visibility on tariff policies,” he said.
In Europe, gasoline demand is expected to be stronger than previously forecast due to sustained exports to West Africa and the Mediterranean, slower EV sales, and a gradual shift by consumers from diesel to gasoline engines.
US MTBE exports to Mexico totaled
1.115
million mt
from January to August 2025
Contributors: Sagar Baul, Carla Bridi, Benjamin Brooks, Rosa Castaneda, Heng hou Cheong, Alejandro Chávez, Fumiko Dobashi, Ashish Dhyani, Davi Dos santos, Leo Engels, Yasmeen Feghali, Alex Fiedosiuk, Isaac Foong, Haitian Fang, Charlene Goh, Jing Kang Goh, Talissa Gomes, Zhi Xuan Ho, Joe Higginson, Gustav Inge Holmvik, Hui Heng, Deja Harrison, Zhi yi Tan, Kamna Kapoor, Tareen Kazi, Sunaina Kura, Keith Mackrell, Andre Mikhail, Mainak Moitra, Daniela Morales pumarino, Esther Ng, Finlay Oriordan, Ashley Peh, Iris Poon, Pankaj Rao, Yazu Romero, María Rosales larios, Baran Serdaroglu, Zong Ming Shin, Archit Singh, Dyvia Shah, Maria-Eleni Tsimeki, Fernando Tiscareno, Karina Trevizan, Chichi Ubani, Luke Warren, Mujidah Yahaya, Nate Zhang
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