Chemical Conversations: MTBE Outlook

Автор Argus

James Elliott talks to leading MTBE expert Roel Salazar, and lead analyst Cassidy Staggers, about the Argus MTBE Outlook:

  • Market direction and underlying trends over the next 12 months
  • Expansion projects and regulatory policies that could affect prices and trade flows
  • Information or visuals with deep relevance to the market
  • How we forecast 24 months ahead
  • Insights to help subscribers make better business decisions

This podcast is delivered by Argus’ MTBE experts using data and insight from the Argus MTBE Outlook.
Get more information and request a free trial


James Elliott: Hello, everyone, and welcome to this "Chemical Conversations" podcast for our MTBE Outlook, brought to you by Argus Media. I'm James Elliott, business development manager for European Chemicals. And I'm joined by Roel Salazar, the consultant who leads our MTBE Outlook, and Cassidy Staggers, our MTBE Outlook service analyst. Roel, thanks for joining us today. My opening question is to you. What is the overall direction of the MTBE market in the next 12 months? And what are the biggest factors underlying that trend right now?

Roel Salazar: The biggest component to what MTBE does in the next 6 to 12 months will be trends in oil and gasoline prices which will be volatile amid the current situation and other situations that may come up in the future. What I'm mainly focused on in the MTBE Outlook is the differentials between MTBE gasoline and how that changed depending on supply and demand fundamentals. There is seasonality built into the MTBE Outlook models that take into consideration changes in RBP and gasoline vents and heavier-driving activity in certain months of the year. But there will be new MTBE plants coming up in the next 12 months in Asia and the U.S. that will alter trade flows to some degree in both regions.

We can see MTBE's differential to gasoline weaken as the new production comes up. In Europe, MTBE is losing market share to ethanol and ETBE, but the component is important in European blending exports to Africa, Middle East, and Latin markets. MTBE will be in higher demand depending on European gasoline inventories, blending economics, and export demand. And gasoline is price versus NAFTA affects the blending economics of MTBE. However, the current situation in Europe could cause MTBE supplies to get tight. Western Europe closed up to 15,000 tons of MTBE imported from Russia while high feedstock costs could cause some petrochemical producers to adjust rates. We know some MTBE units in Europe have switched to ETBE, but due to the high cost of ethanol, many are still sticking with MTBE for now.

James: Are there any major expansion projects or regulatory policies that could meaningfully affect prices and trade flows in the months ahead?

Roel: Yes. There are major expansions coming up in the US and Asia. In Asia, the start of the Hyundai Chemicals 200,000-tonne MTBE line in South Korea in Q4 2021, and then also there's the restart of Malaysia-based Pangeran refining and petrochemical complex, which is 750,000 tons of MTBE. The combination of both of those units is expected to create more supplies in the Asia region which could affect the trade flows. In the US, LyondellBasell’s new MTBE/ETBE unit in early 2023. The actual net MTBE/ETBE production for this plant will depend on the market situation. However, we are expecting that any MTBE or ETBE imports in the US will be heavily reduced. MTBE trade flows to Latin America from the US and ETBE trade flows will not change much, but we could see some of out-of-the-ordinary exports to Asia or Europe if US supplies are long.

As for regulatory policies, implementation of biofuel blending requirements have reduced MTBE demand in the past 20 years. Many of these policies are already in place and we don't expect any big changes in the next few months. China's nationwide ethane mandate which was slated for 2020 was suspended due to lack of supplies. And we don't have any intel at moment if this mandate will resurface again. In Europe, some countries implemented ethane gasoline pumps in order to meet the biofuel mandates. Although this has reduced MTBE demand, it has boosted demand for ETBE as it contains ethanol. We should continue to see higher ethane market share in Europe, but the overall trend is that gasoline demand will fall in the years to come.

James: Let's shift gears now and consider our MTBE Outlook service itself. What is your favorite element of the MTBE Outlook? Maybe it's a piece of information or visual that readers might miss or might not recognize the deep relevance to the market. And Cassidy, please feel free to chime in here. It'd be great to hear your view too.

Roel: Well, an element that some may miss is that we forecast prices for competing components. We have been forecasting the outlook for US reference prices for some time now, but in 2021, we introduced a new outlook for European ETBE.

Cassidy Staggers: My favorite element is one of the recent new additions to the MTBE Outlook, the “what’s changed summary”. And I love how this section highlights the big changes from the previous month's outlook. And it's found on the very first page, so it's easy to find and digest as kind of a quick preview before diving into the deeper market commentary.

James: Share with us your method of forecasting 24 months ahead. What steps do you take to arrive at your conclusions?

Roel: First of all, all of our pick and price outlooks are provided on energy outlook, which includes oil prices and some refined products and also NGO outlooks. We use this as a base to form the MTBE Outlook. From there, we're looking at a variety of parameters to forecast the differential of MTBE versus gasoline. Among the parameters we look at are gasoline specification seasonality, blending economics, estimated margins, changes to production demand and shipping ARBs. MTBE prices are heavily tied to changes in the energy market, so that makes MTBE rather difficult. What our readers should focus on is what our forecast spreads between gasoline and other products to get a good feel of what we're trying to forecast.

James: Great. Fantastic. Thanks for that, Roel. That's all we've got time for today. Thank you so much for listening. We hope you found it useful and insightful. To find out more about the Argus MTBE Outlook or Argus's other chemicals products, please visit

This podcast is delivered by Argus’ MTBE experts using data and insight from the Argus MTBE Outlook.
Get more information and request a free trial

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