Core Insights - The newly established MTBE production facility in Northern China has an annual capacity of 120,000 tons, but the industry still faces multiple challenges despite ongoing "anti-involution" policies [1] Group 1: Supply Dynamics - MTBE production capacity is expected to increase significantly, with an additional 4.35 million tons projected for the second half of the year, marking a 6% increase from the first half and nearly a 16% year-on-year rise [1] - Only 21% of the current MTBE capacity consists of outdated facilities, with 61% of this outdated capacity belonging to the "three major oil companies," which have largely completed upgrades or relocations [1] Group 2: Demand Trends - The demand for MTBE is declining, primarily due to the rising popularity of electric vehicles, which have a lower operating cost compared to traditional fuel vehicles, leading to a market penetration rate exceeding 50% [1] - Domestic gasoline consumption is expected to decline year-on-year starting in 2024, following a peak in 2023, with gasoline production dropping nearly 6% year-on-year in the first half of this year [1][2] Group 3: Price Movements - MTBE prices have significantly decreased, with an average price of 5,527 yuan per ton in the first half of the year, reflecting a nearly 20% year-on-year decline [2] - The price drop has been more pronounced than that of upstream raw materials, resulting in sustained losses for production companies, which have attempted to reduce output to stabilize prices with limited success [2] Group 4: Strategic Recommendations - To escape the "involution" situation, the industry needs to focus on two main strategies: accelerating the development of high-value applications for high-purity MTBE in pharmaceuticals and specialty polymers, and enhancing energy-saving and cost-reduction efforts to improve market competitiveness [2]