Mild winter weather in Northwest Europe has boosted demand for ETBE -- a component used to make gasoline -- at a period when imports of the product into the region are seasonally low, supporting its premium over rival blending product MTBE, market sources said Friday.
ETBE's properties make it more suitable for blending into gasoline in the summer with MTBE favored during the winter, assuming the weather is cold.
Higher than average temperatures have lifted demand for ETBE and led to better driving conditions. Northwest European ETBE is at a $137/mt premium to MTBE, compared with a discount of $21/mt a year ago.
"There is more demand [for ETBE] compared to 2012/13," a source said.
"[It has been a] mild winter in Europe. So, people drive more compared to the icy and snowy Januarys," another market source said.
Additionally, ETBE imports into Europe have been reduced, tightening product availability and supporting its value relative to MTBE.
Brazilian petrochemicals company Braskem, considered one of the biggest exporters of ETBE to Europe, has had only one plant producing ETBE during the past few months, with the rest of its capacity producing MTBE to meet South American demand.
"Exports to Europe have been reduced by about 50%," a source at the company said. "We expect that configuration to remain through Q1."
