MTBE prices in Europe on an FOB Amsterdam-Rotterdam-Antwerp basis have increased $48/mt or 5.6% over the past two working days to $928.325/mt as the country-wide strikes intensified, eating into gasoline supplies in Northwest Europe.
Prices in the US on an FOB basis shot up in line with Europe during the same period, rising $47.925/mt or 5.45% to around $928.325/mt.
Meanwhile, MTBE prices on an FOB Singapore basis fell on Monday and last Friday, dropping $10.50/mt in total to around $842.50/mt FOB.
Sentiment was firmer early Tuesday in Singapore, but this was more due to higher crude oil prices, with front-month ICE Brent crude oil futures seen around $83.93/barrel at 11:31 am local time (0331 GMT), up $2.24/b compared with prices at 4:30 pm on Monday.
The major push factor behind the price surge in Europe was the strike at the two oil terminals at the French Mediterranean port of Marseille -- Fos and Lavera -- which continued on Monday for the 22nd day, while a refinery strike entered the seventh day, with nine out of 11 active French refineries
confirmed to be either halting operations or to have fully suspended them, according to the Confederation Generale du Travail or CGT in an announcement on Monday.
The CGT is one of the main trade unions organizing the strikes against President Nicolas Sarkozy's pensions reform plan to raise the retirement age from 60 to 62.
Prices had been under pressure in Singapore due to less interest from blenders as most did not view a spread of only $3.60/b between 92 and 97 RON on Monday as attractive to buy MTBE in the spot market.
With freight rates between Asia and Europe for MTBE estimated at around $60/mt, the arbitrage window looked open on paper, but the markets are active for very different laycans. MTBE markets are assessed for a more prompt laycan in Europe and the US compared to Asia. In Europe, it is 3-15 days forward from the date of publication, and in the US it is 5-15 days forward, while in Singapore it is 15-40 days forward.
Therefore, it would be too risky to send a vessel from Singapore as it "would take too long to get there," a Singapore-based trader said.
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