Global chemicals company Huntsman expects to see lower margins on MTBE in the fourth quarter with prices expected to fall, it said Tuesday.
The US-based company's third-quarter margins also came in lower than last year, due to cheaper high-octane gasoline and more expensive feedstocks, Huntsman said in a presentation covering its Q3 results.
"Margins for MTBE remained strong but declined compared to the prior year, as MTBE prices fell more than raw material costs," CEO Peter Huntsman said in an earnings conference call.
Its MTBE volume increased in Q3 compared with last year, as its 766,000 mt/year unit in Port Neches, Texas, did not encounter the production issues faced in Q3 2014.
MTBE represents a potential cause for concern for Huntsman moving into the fourth quarter, the CEO said, with pricing seen falling off from the third quarter and from the previous year.
Platts last assessed US Gulf Coast MTBE on Tuesday at $1.7460/gal FOB USG, with demand in Latin American destination markets described as strong and mostly in line with recent fourth quarters.
That price level marks a decline of 27.8% off the average Q3 2015 price of $2.4209/gal FOB USG, according to Platts data, and a 43.7% drop from the $3.1055/gal FOB USG assessed on this date last year. US pricing for the gasoline blendstock typically tracks gasoline and therefore declines in winter months before rising again in the spring, sources have said. In addition, feedstock butane prices rise in the winter thanks to stronger demand for heating and for use as a blendstock for winter-grade gasoline.
Separately, the company's Port Neches plant suffered a power outage Monday that led to shutdowns of some units, including the MTBE unit, subsequently followed by restarts, according to a company filing to state regulators.
The associated emissions event concluded Tuesday, the filing with the Texas Commission on Environmental Quality said.
