US rail shipments of MTBE to Mexico on the rise

Rail shipments of US-produced gasoline additive MTBE to Mexico are on the rise as port delays and other infrastructure issues have pushed imports away from waterborne routes.

Smaller buyers of MTBE are coming into the US Gulf coast market and taking around 5,000 bl, according to sellers. Deals for 5,000 bl are not typical of volumes moving to Mexico as larger shipments of MTBE usually transfer via waterborne-vessel.

Last week, Mexico's president said the country's army and navy will take charge of security at the country's border crossings and all marine ports.

The move is directed at controlling drug trafficking, port mismanagement, and corruption. This has delayed movement of fuel and other products.

Mexico is a large consumer of MTBE, taking nearly two out of every three barrels from US makers.

Over the last several months, MTBE has been increasingly shipped from the US to Mexico neatly, or in pure form, rather than blended to make finished gasoline as Pemex has increased domestic gasoline production. But Mexico's lack of reliable MTBE production and mandate in the top 3 Metropolitan zones require import of the octane enhancer.

By Steven McGinn