Ethyl tertiary butyl ether (ETBE) values continued to slide this week as the market entered a more balanced state in comparison to the severe tightness seen for much of July.
Bids and offers in terms of premiums over prompt methyl tertiary butyl ether (MTBE) are at $200-250/tonne FOB ARA, down from $265-300/tonne. However, traders said most business is being concluded towards the low side of this range.
The MTBE market is steeply backwardated, with material for the second half of August priced around $60/tonne lower than prompt. When accounting for the delivery time of ETBE parcels and the fact that business is concluded on an absolute price basis, the above premiums could be considered equal to around $270/tonne in real terms, according to market players.
Premiums for regular ETBE are unlikely to hit again the levels seen in July of around $300/tonne, sources said. These high values were the result of severe tightness which occurred because of a coincidental drop in imports and peak in demand. While demand remains strong, the high prices in July were largely a result of players being caught short and overvaluing the market. Producers do not expect to see such heavy buying again soon and also note that regular imports from the US and Brazil have resumed.
While prices of regular ETBE have receded with the more balanced conditions, material holding the International Sustainability and Carbon Certification (ISCC) has been more resilient at levels around $290/tonne, due to its relative scarcity and high demand in the key German market.
The midpoint for MTBE trades this week was $1,251/tonne FOB AR, down from $1321.50/tonne the previous week. This put the ETBE flat price range at $1,451-1,501/tonne FOB ARA, down from the previous range of $1,586.50-1,621.50/tonne.
T2 fuel ethanol prices decreased by €5/cbm to €620-625/cbm, while T1 prices moved up $5-10/cbm to $588-875/cbm.
($1=€0.70)
This week on ICIS news ( www.icis.com ):
03-Aug-11 22:35 US crude futures slide $1.86/bbl on build in inventories
03-Aug-11 21:56 Brazil ethanol trader Copersucar cancels initial public offering
03-Aug-11 20:07 US ethanol stocks rise 0.2%; production up slightly
03-Aug-11 18:36 Three energy companies apply for first Czech shale gas licences
