Market and product
European ETBE premium over MTBE hits two-and-a-half-year high
Platts assessed ETBE barges for spot delivery at $1,277/mt FOB AR, a$166/mt premium to MTBE and the highest level seen August 25, 2011.
According to market sources, the rise in the premium was mainly driven bytight supply in the region, caused by fewer import volumes seen from Brazil.
"Fewer volumes are coming from Brazil than in previous years, they areproducing a bit less, so when we need ETBE...we don't have many barrelsaround," a source said, adding that the limited supplies were coinciding withthe start of the European driving season.
In addition, demand for ETBE typically surges in the northern hemispheresummer as it is favoured as a blending component over MTBE due to its lowerRVP specifications, which cuts gasoline evaporation.
Last year, Brazilian petrochemical company Braskem converted itsproduction unit in Rio Grande do Sul from ETBE to MTBE, leading to much higherdemand for ETBE on the spot market, market sources said.
In Northwest Europe there was selling interest for ETBE at a $200/mtpremium to MTBE, but there was no buying interest, market sources said.
