Weaker demand of gasoline components has led to further falls in the MTBE factor and mixed aromatics premiums, according to the latest Platts data.
The MTBE factor continued its march downwards, hitting a two-week low of 1.394 Wednesday.
The nitration grade toluene and mixed xylene premiums fell to their lowest levels since July 23 at $105/mt and $100/mt respectively.
The MTBE price was assessed at $756/mt FOB ARA Wednesday, shedding 41.1% in value in just six weeks from its year-to-date high of $1,067/mt on July 9.
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Toluene and mixed xylene also dropped to their lowest levels since early April to be assessed at $647.50/mt and $642.50/mt FOB ARA Wednesday respectively.
The declines have been attributed to slowing demand from gasoline blenders ahead of winter specs.
The introduction of winter specs will allow blenders a wider choice of blending components, such as butane, reducing the need to use MTBE and mixed xylenes in their blending mix.
“The [toluene] premiums will be lower as blenders have access to other cheap components,” a source said Thursday.
Another source agreed. “Toluene is less and less a blending product. Toluene is detaching a bit from energy, at least for TDI grade toluene.”
A third source said mixed aromatics would no longer be added to the blending pool after September.
MTBE’s primary use is as a blending component. Toluene and MX are also feedstocks for downstream products, such as benzene, paraxylene and orthoxylene. However, unprofitable conversion margins offered no support to falling premiums.
Chemical demand was reported to be minimal. “There is zero demand from chemical applications and conversion units,” the first source said. “Only when conversion margins turn positive, I expect liquidity. But they are deep in the negative territory.”
This view was reinforced by other sources who said mixed aromatic prices will need to fall for any chemical demand to make sense.
The spread between benzene and toluene reached a six-week low of $18/mt Wednesday.
The MX-PX and MX-OX spreads were at healthier levels at $125/mt Wednesday, but remained below profitable conversion levels, pegged by a source at a minimum of $150/mt.
