The European ETBE premium to MTBE hit the highest since April 12 Tuesday due to stronger market fundamentals, according to Platts data and trading sources.
The ETBE premium to MTBE rose to $54.75/mt at Tuesday's market close from $48.75/mt the previous day, when ETBE was assessed at $1,137/mt FOB AR and MTBE was assessed at $1,082.25/mt FOB ARA, Platts data showed.
MTBE and ETBE are mixed into gasoline to boost octane numbers and ensure the fuel burns more efficiently. ETBE also helps refiners meet bio-fuels mandates as it is produced using crop-based ethanol.
The previous lower ETBE prices attracted buying interest and pushed up the price, a source said. "I think ETBE just remains very weak...but also very attractive" he said.
The average premium commanded by ETBE over fuel ethanol in Europe was assessed at $70.03/mt in April, down by $141.4/mt from March, according to Platts data. At Tuesday's close, the ETBE premium over ethanol was at $55.63/mt.
Refiners can use more or less ETBE or ethanol to meet final gasoline specifications and bio-fuels mandates depending on blending economics.
"As a blender, if you have a choice between ETBE and ethanol, it [the spread] has an effect" a source said.
Typically, when the spread between ETBE and ethanol is narrower, there is more interest for ETBE due to its better blending properties and lower RVP, the source said.
RVP is a generic term used by refiners to measure gasoline volatility, which has to be reduced during summer months to prevent excessive fuel evaporation.
However, the value of ETBE's blending properties can vary in different regions and for different market participants, the source added.
ETBE sellers remain hesitant to part with volumes in expectation of a stronger market, sources said previously.
