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Argus MTBE Annual 2017 illuminating the markets Market Reporting Consulting Events argusmedia.com/consulting Petrochemicals
Argus MTBE Annual 2017
illuminating the markets
Market Reporting
Consulting
Events
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Petrochemicals
Argus MTBE Annual 2017
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Summary MTBE demand has increased in the past few years, driven by cleaner fuel requirements in China and increased gasoline consumption in Asia, the Americas and the Middle East. Some countries in Asia and Latin America are also dealing with a lack of internal infrastructure and are importing transportation fuels from neighboring countries. The US has bene�ted under the current environment, exporting gasoline and blending components to Latin America and the Caribbean while having access to cheap feedstocks because of shale gas.
Mexico has become a major consumer of MTBE behind China and Saudi Arabia. Mexico will continue to import MTBE from the US for years to come as the blend- stock is mandated in the top three metropolitan zones. With Mexico opening the fuel markets to foreign investors, it should bring new and old faces back to the MTBE markets.
The following �gure displays global MTBE supply and demand for the next �ve years.
Total MTBE consumption reached 22.4mn t/yr in 2016, up 2.6pc from 2015. China represents 96pc of total growth in the past �ve years. Total MTBE consumption will reach 26.5mn t/yr by 2021 mainly driven by China, but growth will also continue in Latin America and the Middle East. MTBE use in Europe continues to be a�ected for a variety of reasons. European countries are increasing ethanol blended gasoline in order to meet biofuel targets. Some European countries are starting to see an increase in gasoline vehicles sales versus diesel but it mainly bene�ts ethanol and ETBE. Increased ethanol use in Europe will limit MTBE demand in the long term as more E85 and E10 �lling stations are added. The EU mandates 10pc renewable fuel use by 2020, but the results have been mixed so far. Growth in MTBE demand could still take place due to gasoline exports to Africa and Latin America.
Argus MTBE Annual 2017
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Key Bene�ts
MTBE markets in the other Asia-Paci�c countries will be limited by the econom-ics of blending and competiveness of MTBE. In the next few years, Singapore will see a rise in imports as new capacity comes on line in Taiwan and South Korea, which are both looking at exporting MTBE. China should have more than enough supplies in the next 10 years via current capacity and new additions. Therefore, China will trade limited volumes going forward and will only see trades when an arbitrage is viable. Argus expects Chinese operating rates to increase as demand increases.
Global MTBE capacity stood at 33mn t/yr in 2016 and is expected to rise to 39mn t/yr by 2021. The majority of capacity additions are located in China because new PO/MTBE units were built in 2015. Another PO/TBA plant is expected to start up in the summer of 2017. Other Chinese MTBE units will be built as well totaling 3.1mn t/yr of total MTBE capacity additions in 2016-21. LyondellBasell announced a PO/TBA unit to be built by 2021 in the US Gulf coast. The new PO/TBA unit will have the capability to feed into flexible units where both ETBE and MTBE are produced. Enterprise will build a new isbobu-tane dehydro plant in 2019 for the production of high purity isobutylene and to feed the underutilized MTBE unit. The Malaysian Rapid re�nery is expected to add 550,000 t/yr of MTBE capacity by 2020. There are also plant additions expected in South Korea and Taiwan.
Global ETBE demand in the past few years has declined in favor of MTBE because of producers opting for more competitive priced feedstock, but an increase in ETBE demand in Japan will drive growth for the product during our forecast period.
This annual report covers global supply and demand for MTBE/ETBE with �ve years of history (2011-2016) and four years of projections (2017-2021), with an extended forecast to 2026 available online for Argus Direct users. Data for the historical years are based on actual performance, though some estimates are used in a few areas where data is not available. Our projections are intendedto match your current planning cycle and our long-term forecasts can be performed on a single client basis.
The MTBE annual helps you to:
• Identify trends in production and consumption
• Understand cost and price drivers
• Assess developments in product balances
• Develop strategies to exploit opportunities while limiting risk
Argus MTBE Annual 2017
argusmedia.com/consulting
Key Findings • China’s switch to China V gasoline speci�cations has accelerated growth in demand for MTBE and other blendstocks. China was previously expected to export MTBE a�er new plant additions, but outages at key production sites and higher MTBE demand continue to force China to import MTBE. Imports should decelerate a�er new capacity is added in 2017. China could consume more MTBE if the country adds a consumption tax to reformate imports.
• Mexico is expected to continue importing large amounts of MTBE throughout our forecast period, but the government is now allowing the use of ethanol in some regions. Mexico allowed independent service stations to freely import gasoline and diesel starting in April 2016. Actual imports from independent companies may not rise until gasoline prices are not controlled by the government.
• Middle Eastern gasoline demand is growing and MTBE exports out of the region should decline as internal use increases. Asia-Paci�c countries will require less MTBE from the Middle East as capacity in the region increases.
• Western Europe will have slightly higher MTBE usage as a result of favorable blending economics, but declining regional gasoline consumption and increased ethanol use will limit the upside. In the long-term, gasoline use will take market share from diesel, but it will bene�t ethanol more than MTBE. European MTBE markets will depend on gasoline blending for exports to Latin America and Africa.
• ETBE consumption in Japan will reach 1.4mn t/yr in 2017 as the country tries to meet its biofuel targets. Japan has continued to meet its biofuel targets since 2011. The country has not disclosed biofuel requirements beyond the 2017 �scal year which ends in March 2018.
Argus MTBE Annual 2017
argusmedia.com/consulting
Key Features In addition to providing additional details and background on these key �ndings, the Argus MTBE Annual 2017 has been updated throughout and includes the following major components:
• The supply and demand balance and forecast for every country that produces or consumes MTBE and ETBE from 2012 through 2026.
• An overview of regional and world MTBE and ETBE markets.
• A history and forecast of MTBE and ETBE imports and exports by country.
• Analysis of market changes and trends by country and region.
• Key MTBE market drivers and the impact on MTBE supply and demand.
• Useful production technical data.
Table of Contents Section 1: IntroductionSection 2: World analysis Section 3: Asia-Paci�c Section 4: Western Europe Section 5: Central and eastern Europe Section 6: Russia and Central Asia Section 8: North America Section 9: Central and South America
Additional Services Argus experts analyze the global markets for fuel oxygenates and link them to international gasoline markets. These services provide timely market updates, comprehensive analysis of events and trends, including coverage of regional supply/demand fundamentals and spot pricing for fuels and octane.
• Argus Fuels and Octane - weekly newsletter with ongoing commercial analysis of events and trends, as well as current spot pricing for the fuels and octane market
• Argus MTBE Outlook - 24-month rolling price forecast, covering MTBE and related markets such as crude, gasoline and natural gas, published monthly.
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