The value of European MTBE versus Eurobob gasoline barges lost ground this week, driven down by a combination of more balanced supply and the steep backwardation in gasoline.
The relative value measured as a factor, or ratio, was assessed Wednesday by Platts at 1.1069 compared with last week's level of 1.145. Eurobob gasoline barges traded at $1,085/mt FOB Rotterdam, down from Tuesday's level of $1,136/mt.
Wednesday's factor equated to an outright MTBE price of $1,201/mt FOB ARA down $72.75/mt from Tuesday's assessed level of $1,273.75/mt.
Two MTBE trades were done during the Platts Market on Close assessment process on Wednesday. Noble Clean Fuels sold a 1,000 mt May 22-26 loading parcel at $1,199/mt FOB ARA to LyondellBasell while a 1,000 mt parcel for loading on May 16-20 changed hands at $1,203/mt, AOT selling to Noble.
Market sources said that the factor had been under pressure from the steep backwardation in gasoline which had been seen at around $40/mt between May and June.
"Maybe [there's] just also better supply," an industry source said Wednesday. But with gasoline weaker, led down by the fall in crude, this had added further pressure on MTBE, according to sources.
"Well gasoline has softened a lot so I think MTBE [has] also. [The MTBE outright price] was still backwards, but not very much," the industry source said.
Other sources pointed to import cargoes arriving after the factor hit a 2011 high of 1.2964 on April 11, according to Platts data.
Persian Gulf producers diverted swing barrels away from Asia with European prices rising above China levels in April, sources said.
This was due to the NWE MTBE price hitting $1,439/mt FOB ARA on April 11, its highest level since Platts began assessing it in June 1989.
"I think the product we have been talking about since mid-April should arrive round about now," another industry source said. This indicated that the market was balanced and therefore sellers were being prompted by lower blend value and the backwardation to offload product.
