The European spot price of ETBE hit a near 10 month-low Friday to be assessed at $692/mt FOB AR.
ETBE’s spot price has now shed $502/mt since this year’s high of $1,194/mt on July 9, at the height of peak European seasonal demand for gasoline.
ETBE is a low-RVP octane booster that can also be used to fill biofuel mandates, as bio-ethanol is usually a feedstock, taking up 43% of ETBE’s content.
Lower gasoline blending demand, caused by seasonal demand patterns and narrowing gasoline blending margins, have caused ETBE’s relative strength against Eurobob gasoline barges to drop.
ETBE’s premium over Eurobob gasoline barges on Friday dropped to $191.25/mt, from $408.50/mt a month ago.
ETBE spot prices were supported by high MTBE spot prices throughout September, as ETBE traditionally trades at a premium to MTBE.
A collapse in MTBE’s factor to gasoline last week caused ETBE prices to drop accordingly.
MTBE’s factor to gasoline was assessed at 1.222 Friday, compared with 1.456 on October 2.
Around 43% of ETBE’s content is ethanol, while the remainder is isobutylene. European ethanol prices have remained firm throughout October.
The European spot price of ethanol was assessed at $816.50/mt FOB Rotterdam Friday.
European ethanol prices have hovered above the $800/mt mark since mid-July, as the ethanol market has been tight since the second quarter due to the closure of Ensus’ ethanol plant in northeast England.
Due to strong ethanol prices, ETBE production margins are under pressure.
Along with ethanol, raffinate-1 is a key feedstock of ETBE, accounting for 57% of the octane booster’s content.
The European spot price of raffinate-1 was assessed at $560/mt Friday, taking feedstock costs of ETBE to $670/mt, leaving producers with a $22/mt margin at current spot prices.
