A cargo of US-produced MTBE was bound for Mexico Wednesday, for just the second time this year, sources said.
Fixtures for MTBE are not often seen on the spot market, a source with a shipbroker said.
MTBE is primarily used as a blending agent in gasoline to increase the octane level. However, since the product is banned in the US due to environmental concerns, all MTBE produced in this country is either directly exported or blended at a load port to achieve a specific grade of gasoline.
A shipping source agreed.
"PMI often moves MTBE to the east coast of Mexico, but they normally blend it with unleaded gasoline at the load port to get a specific grade," he said. "But, once in a while, they take a full load of MTBE as well."
On Wednesday, the Cape Bacton was heard to be fully fixed by PMI at a lump sum of $180,000 to move a 38,000 mt cargo of MTBE from the US Gulf Coast to the east coast of Mexico. The ship is due to begin loading February 24.
That freight rate calculates out to $4.74/mt, or 57 cents/b.
US Gulf Coast MTBE was assessed at $2.0015/gal FOB USG, up 55 points day on day, moving slightly higher with support from gasoline prices which realized positive gains across the globe on the day.
The US Gulf Coast MTBE assessment is just above $2/gal, a price level it has now been above for 18 sessions this year after reaching that point last month for the first time since September 2015, according to S&P Global Platts data.
According to cFlow, S&P Global Platts trade flow software, the Cape Bacton was located off Mexico's Yucatan Peninsula on Wednesday morning and was steaming toward Houston.
Another MTBE cargo was reported on February 10 and that was the first time such a movement had been heard going back through January 2015, although MTBE is seen periodically traveling from the US Gulf Coast to Venezuela and Chile.
