Global Methyl Tertiary Butyl Ether Market - 2022-2029

Global Methyl Tertiary Butyl Ether Market - 2022-2029

Market Overview

The global methyl tertiary butyl ether market size was worth US$ XX million in 2021 and is estimated to record significant growth by reaching up to US$ XX million by 2029, growing at a CAGR of XX% within the forecast period (2022-2029).

Methyl tertiary-butyl ether (MTBE) is an organic chemical having the structural formula (CH3)3COCH3. It is also known as methyl tert-butyl ether and tert-butyl methyl ether. MTBE is a colorless, volatile and flammable liquid that is only slightly soluble in water. It is primarily utilized in gasoline engines as an anti-knocking agent and an octane enhancer.

The chemical interaction of methanol and isobutene produces methyl tert-butyl ether (MTBE), which is mostly used in gasoline. MTBE is a frequent ingredient in reformulated fuels designed to minimize smog and meet Clean Air Act goals. Since 1979, MTBE has been produced in significant quantities as a gasoline additive.

However, due to many countries restricting or banning its use, MTBE manufacturing has dropped. By late 2006, most American gas stations had stopped using MTBE as an oxygenate. As a result, domestic production has continued to fall. As a result, MTBE producers are left with obsolete feedstocks and manufacturing equipment. As a result, it is desirable to reallocate the feedstocks and industrial assets previously dedicated to MTBE production, resulting in a financial gain for MTBE producers.

The MTBE process has been reported as a method for generating olefins. Butene can be produced by dehydrogenating a feed containing C4 molecules. At least some of this product can be bypassed and cracked around an MTBE unit, yielding propylene, ethylene and butane. Light hydrocarbons can be cracked again to produce propylene, ethylene and butane in a second cracker.

Market Dynamics

Increasing demand for methyl tertiary butyl ether as a fuel additive and solvent in gasoline engines.

Increasing demand for methyl tertiary butyl ether as a fuel additive and solvent in gasoline engines.

The global methyl tertiary butyl ether market is majorly used as a fuel additive in gasoline engines due to its high oxygen content raising property. It also aids in the complete combustion of gasoline and reduces banging within the engine, extending the machine's life span.

The addition of methyl tertiary butyl ether (MTBE) in gasoline also helps to reduce car emissions. MTBE has been used as an antiknock (octane rating) additive in gasoline in U.S. since 1979, replacing tetraethyllead (TEL) to avoid engine knocking. Oxygenates also aid in the complete combustion of gasoline, lowering tailpipe emissions and diluting or replacing gasoline components like aromatics (e.g., benzene).

The expansion of the automobile industry in Asian regions is likely to lead to increased demand for MTBE. Furthermore, rising gasoline and gasoline additives in the oil and gas and maritime industries will likely boost MTBE consumption. The presence of rigorous laws about groundwater contamination due to gasoline leakages containing MTBE, on the other hand, is projected to be a major stumbling block to the expansion of the methyl tertiary butyl ether industry.

Furthermore, since the tert-butyl group prevents MTBE from producing potentially explosive peroxides, it is widely utilized in the industry as a safer alternative to diethyl ether (which is regularly employed in academic research). It is also employed in academic research as a solvent, though less frequently than diethyl ether. MTBE is a very poor Lewis base and does not assist the creation of Grignard reagents, despite being an ether. It's also corrosive to strong acids. It has a hazardous reaction with bromine. Furthermore, MTBE is injected directly into the gallbladder in a medical procedure known as contact dissolution therapy to dissolve gallstones.

Stringent government regulation and the high cost of eliminating MTBE from groundwater and soil contamination are the primary challenges to the growth of the methyl tertiary butyl ether market.

The Environmental Protection Agency (EPA) plans 2000 to phase down MTBE use nationwide over four years. Without waiting for federal limits, some states adopted MTBE bans. MTBE was outlawed as a fuel additive in California in 2002. Since 2004, New York has prohibited the use of MTBE as a fuel additive. On the other hand, MTBE is still authorized for other industrial applications in the state.

The Energy Policy Act of 2005, as passed by U.S. House of Representatives, did not include a provision protecting MTBE producers from water contamination lawsuits. The mentioned clause was first suggested in 2003 and some regarded it to be a top objective of Tom DeLay and Rep. Joe Barton, the Energy and Commerce Committee's chairman at the time.

Furthermore, the cost of eliminating MTBE from groundwater and soil contamination in U.S. was anticipated to range between US$1 billion and US$30 billion, including the removal of the chemical from aquifers and municipal water systems, as well as the replacement of leaky underground oil tanks. The cost to oil firms to clean up MTBE in wells owned by the city of Santa Monica, California, was projected to be more than US$200 million in one case. In another case, in 2009, New York City predicted a US$250 million cleanup cost for a single wellfield in the Queens borough. Thus high costs and strict government regulations are hampering the market growth for the product.

COVID-19 Impact Analysis

COVID-19 has impacted the automotive sector, with global car sales falling from approximately 74 million units in 2019 to around 64 million units in 2020 due to the lockdown. Chinese parts shipments are being disrupted, large-scale manufacturing disruptions occur across Europe and assembly factories in U.S. are closing.

Starting in China, suppliers worldwide quarantined or shut down production lines completely. Furthermore, legal and trade constraints, such as closed borders, exacerbated the shortage of essential parts and restricted supply distribution in the automotive industry.

In addition, OEMs were forced to shut down production due to a lack of parts and a just-in-time production method, quarantine measures and a decreased workforce. The condition is improved by securing liquidity and reducing overproduction due to decreased automotive sales.

Thus, the slowdown of the automotive industry impacted the market for methyl tertiary butyl ether. However, many automotive companies are going back to the track. They have started their production unit, which has improved the demand for methyl tertiary butyl ether. The reopening of automotive companies is expected to fulfill the ongoing demand for the product.

For instance, India's gasoline demand is expected to achieve a new high this fiscal year as more people take on the road for business and pleasure following COVID-19 restrictions. Safety-conscious Indians buy more automobiles and utilize personal vehicles to commute as they start revenge tourism,' flocking to tourist areas after months of restrictions, despite record-high gasoline prices.

Segment Analysis

The global methyl tertiary butyl ether market can be segmented on the manufacturing process, application and region.

MTBE is the world's second-largest gasoline additive type due to its reduced cost and effectiveness

The global methyl tertiary butyl ether market is segmented into application gasoline additive, isobutene, solvent and other applications. Gasoline additive holds the highest market share for the global methyl tertiary butyl ether market. Methyl tertiary butyl ether (MTBE) is a common gasoline additive that acts as an anti-knocking agent and an octane booster in gasoline engines.

MTBE is the world's second-largest gasoline additive type due to its reduced cost and effectiveness. Aside from that, MTBE is a cost-effective replacement for harmful gasoline components such as olefins, lead, benzene and sulfur.

Furthermore, gasoline is the most common application of MTBE in terms of value. Because of environmental and health concerns, MTBE has been used in gasoline since 1979. The usage of MTBE as a gasoline addition began with the substitution of metallic additives like lead and Methylcyclopentadienyl Manganese Tricarbonyl (MMT). In the past few years, MTBE has increased demand in the gasoline application driven by the considerable amount of MTBE used in gasoline. The demand for MTBE in the gasoline market is driven by rapidly growing vehicle fleets, particularly in emerging nations and increasing urbanization.

The demand for MTBE has been rising in nations like China, India, South Korea, Mexico and Saudi Arabia, owing to rising gasoline demand from the automotive industry and the increasing number of on-road vehicles.

However, Because of COVID-19, gasoline consumption fell by 93.9 million barrels per day in January 2021 and by about 2.8 million barrels per day globally. Although, gasoline demand is expected to rebound by 5.7 million barrels per day in 2021, reaching roughly 97.7 million barrels per day. The presence of substantially less harmful and eco-friendly replacements and tight regulations has hampered the global growth of the MTBE market for the past few years.

Geographical Analysis

Asia-Pacific MTBE demand is mostly driven by rising gasoline demand and rising investments by the key players in the business

Asia-Pacific held the majority of the worldwide market share. The region's MTBE demand is mostly driven by rising gasoline demand.

The extensive availability of MTBE as a low-cost feedstock, combined with its attractiveness as a substitute for aromatics in gasoline, is propelling the MTBE market in the region forward. Many countries, including India, China, South Korea and Indonesia, have seen refinery investments to boost their production capacity.

For instance, In 2019, India utilized approximately 674 thousand barrels per day, while China consumed approximately 3.08 million barrels per day, with worldwide gasoline consumption totaling 24.32 million barrels per day.

Some of the new investments planned or under consideration include S-Oil Corp.'s Phase 2 Petrochemical Project in Ulsan, South Korea; a USD 4 billion upgrade project at Pertamina Balikpapan in Indonesia; a Saudi Arabia-India joint venture for the West Coast Refinery and Petrochemical Project in India; and Saudi Aramco's investment plan in a refinery-petrochemical project in China. As a result of the start-up of activities at such refineries, the market is expected to rise rapidly in the forecast period

Competitive Landscape

The global methyl tertiary butyl ether market is highly competitive with local and global companies. Some prime companies contributing to the market's growth are SABIC, LyondellBasell Industries, Zhenhai Refining & Chemical, Huntsman Corporation, Panjin Hayen Industrial Group, Evonik Industries AG, Reliance Industries Ltd., Oxeno Antewerpen, Petronas and others.

The major companies are adopting several growth strategies such as acquisitions, product launches and collaborations, contributing to the global growth of the methyl tertiary butyl ether market.

SABIC

Overview: Saudi Basic Industries Corporation, known as SABIC, is a growing Saudi Arabian multinational chemical manufacturing company with 70% of the Company’s shares owned by Saudi Aramco and the remaining 30% publicly traded on the Saudi stock exchange. The Company holds four strategic business units – Petrochemicals, Agri-Nutrients, Specialties and Metals. The Company has key market target areas, including construction, agri-nutrients, electrical and electronics, medical devices, packaging, transportation and clean energy. SABIC has major industrial operations in the industrial city of Al-Jubail on the Arabian Gulf and in Yanbu on the Red Sea. The Company’s manufacturing, sales, technology and innovation facilities are in 4 regions - MEA, Asia, the Americas and Europe.

Product Portfolio:

SABIC BIO - methyl tertiary butyl ether (bio-MTBE): MTBE (Methyl Tertiary Butyl Ether) is a colorless, volatile, flammable liquid with a faint odor. Its main characteristics are mobility with gasoline, low blending vapor pressure and distillation qualities. MTBE is somewhat soluble in water and does not cause phase separation. It has a lower blending density, a lower blending vapor pressure and no corrosion issues compared to other oxygenated fuels. BIO-MTBE includes 0.3635 percent bio-methanol from advanced feedstocks defined in Annex IX part A of the Renewable Energy Directive.

Key Development

In June 2020, Aramco completed the purchase of a 70% stake in Saudi Basic Industries Corporation (SABIC) from the Saudi Arabian Public Investment Fund (PIF), the country's sovereign wealth fund, for a total purchase price of US$ 69.1 billion.

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