European ETBE premium to MTBE reaches historic high
The European ETBE premium to MTBE rocketed Wednesday to the highest level since S&P Global Platts began assessing the spread in 2012, amid wide differentials to feedstock prices.
Petrotahlil - The relationship of the ethanol-derived fuel ether ETBE to the spot MTBE price -- was assessed up $22/mt on the day at $245/mt Wednesday, the highest since 2012, when the Platts FOB AR ETBE premium assessment was launched.
ETBE production typically comes from the same facilities as MTBE, with ethanol used to make ETBE, while MTBE's co-feedstock in the C4 stream is methanol.
The firm premium comes from a widening in the differential between raw material ethanol and methanol, according to sources.
Meanwhile, increasing mandates and pretty strong overall bio-component values in Europe have also supported strong ETBE prices, one blender said.
Mandate pressure resulted in T2 ethanol prices climbing to seven-year highs in November, where they have remained since.
Increasing demand has been set against already maximized European ethanol production, with margins high for the entirety of 2019. This has left the market tight and dependent on imports.
The outlook remains bullish for European ethanol, with blend levels in 2020 setting the cap for crop-based biofuels for the next decade, at a maximum of 7%.
As a result, there will likely be an incentive to blend as much as possible in order to get close to that 7% level, as crop-based biofuels are the cheapest way to meet blending targets. The rollout of E10 -- the 10% ethanol gasoline blend -- across several European countries is also encouraging more blending.
The ETBE price was assessed at $959/mt FOB AR Wednesday, down just $4.75/mt on the day, with MTBE at $714/mt and Eurobob gasoline barges at $576/mt FOB AR, down $26.75/mt and $16/mt respectively.
T2 ethanol was last assessed at Eur683/cu m ($757.24/cu m) FOB Rotterdam, up Eur5.75/cu m on the day.
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Source : Platts
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