The European premium of ETBE over MTBE -- two gasoline components -- hit a two-and-a-half-year high of $166/mt Tuesday, as imports from Brazil fell, according to market sources.
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 by tight supply in the region, caused by fewer import volumes seen from Brazil.
"Fewer volumes are coming from Brazil than in previous years, they are producing a bit less, so when we need ETBE...we don't have many barrels around," a source said, adding that the limited supplies were coinciding with the start of the European driving season.
In addition, demand for ETBE typically surges in the northern hemisphere summer as it is favoured as a blending component over MTBE due to its lower RVP specifications, which cuts gasoline evaporation.
Last year, Brazilian petrochemical company Braskem converted its production unit in Rio Grande do Sul from ETBE to MTBE, leading to much higher demand for ETBE on the spot market, market sources said.
In Northwest Europe there was selling interest for ETBE at a $200/mt premium to MTBE, but there was no buying interest, market sources said.
