Octane blending
Overview
Demand for high octane components vary throughout the year depending on seasonality, premium gasoline market share, and refinery performance. Stricter gasoline standards also contribute to demand for high octane components.
Among the list of high-octane components are reformate, alkylate, MTBE, ETBE, toluene, xylenes, ethyl benzene, and others. Some of these components primarily see demand from the chemical market but could be diverted to the gasoline pool if there are returns in that segment.
Each blendstock has specific octane rating and rvp content that determines its value in the gasoline pool. Gasoline blenders will look at market prices for each of the octanes and see how it relates to the value in the gasoline pool. In the summer of 2023, high volumes of ethylbenzene were diverted to the gasoline instead of the production of styrene, as styrene prices fell below ethylbenzene blend value.
MTBE is a high-octane component for gasoline blending, but only used in some countries. MTBE demand has been led by growth in Asia, Middle East, and Latin Markets. Other regions have focused on increased biofuel usage which includes ethanol and ETBE.
Argus’ experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global markets.
Latest octane blending news
Browse the latest market moving news on the global octane blending industry.
Ford boosts trucks on demand, Novelis fire
Ford boosts trucks on demand, Novelis fire
Houston, 23 October (Argus) — US automaker Ford is increasing its full-size pickup truck production in response to higher demand and to recover lost production after a major fire at a New York aluminum mill. The automaker said it will increase production of its F-150 and Super Duty trucks by 50,000 vehicles in 2026, with work being added at its Dearborn, Michigan and Kentucky truck plants. The US auto industry has faced supply challenges since a major fire in mid-September at aluminum-roller Novelis' Oswego, New York mill took down the entire plant for two weeks and the hot mill until the first quarter of 2026. The Oswego plant is a major supplier of aluminum sheet to the automotive industry. Ford will also keep production of its less-profitable F-150 Lightning pickup truck paused as it focuses on producing more profitable internal combustion engine and hybrid F-150s which it says also require less aluminum. Ford employees who previously made the electric F-150 will be transferred over to Dearborn to boost non-Lightning F-150 production by 45,000 vehicles. Ford will increase the workforce at Dearborn and supporting plants by nearly 1,400 workers. Ford aims to produce 5,000 more Super Duty pickups at its Kentucky truck plant in 2026, increasing that facility's workforce by an additional 100 or more workers. US steelmaker Steel Dynamics (SDI) said it has been able to produce and qualify some of its aluminum sheet products at its new aluminum mill for the automotive industry. SDI continues to ramp up its 650,000 short tons/yr aluminum mill located in Columbus, Mississippi. Global automaker Stellantis, which owns US brands such as Dodge, Jeep and Chrysler, said an unspecified parts shortage is taking down its Warren, Michigan sports utility vehicle plant for three weeks. By Rye Druzchetta Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Azoty resumes talks to sell PDH/PP plant to Orlen
Azoty resumes talks to sell PDH/PP plant to Orlen
Warsaw, 25 September (Argus) — Polish chemical company Grupa Azoty has resumed talks to sell its troubled 437,000 t/yr propane dehydrogenation (PDH) and polypropylene (PP) plant in Poland to integrated oil firm Orlen. In July, Orlen dropped plans to buy the entire plant and limited its interest to port and storage assets. But it has now agreed to reopen talks to acquire the whole PDH/PP facility or a stake in it, Azoty said. The plant is in Police near Szczecin. The amended memorandum aims to conclude negotiations by the end of this year, Azoty said. Azoty president Andrzej Skolmowski said the project needs a new owner or at least "a partner" because continuing alone is beyond the firm's financial capacity. "We do not have sufficient funds to complete and commercialise the project," he said. "We have come back to talks with Orlen to find a solution." Orlen confirmed the talks have restarted but said it would not comment further. The company earlier this week reshuffled its management board , appointing a new chief financial officer and a board member for energy transition. The Polish government holds effective control of both firms, with stakes of 33pc in Azoty and 49.9pc in Orlen. Azoty said PDH/PP operations have been halted since July after a PDH unit malfunction. The firm decided to shut the unit for extended repairs. If polypropylene demand improves, it said it could restart the PP unit without completing PDH repairs. Azoty said the PDH/PP project — which began operations in 2023 but has not yet been fully commissioned — is a key reason for its continued losses. Azoty posted a loss of 878mn zlotys ($242mn) in the first half of 2025, widening from a 748mn zlotys loss a year earlier. By Tomasz Stepien Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Japan’s petchem firms to integrate polymer production
Japan’s petchem firms to integrate polymer production
Tokyo, 10 September (Argus) — Japan's major petrochemical producers Sumitomo Chemical and Prime Polymer plan to integrate their domestic polyolefin production businesses to optimise operations and increase competitiveness. The companies agreed on 10 September that Sumitomo Chemical will buy a 20pc stake in Prime Polymer — a joint venture between Mitsui Chemicals and Idemitsu. This will leave Mitsui Chemicals and Idemitsu with 52pc and 28pc stakes, respectively. Financial terms of the deal have not been finalized yet. Mitsui Chemicals currently owns 65pc of Prime Polymer and Idemitsu 35pc. Sumitomo Chemical's domestic polyolefin production businesses, including polypropylene (PP) and linear low-density polyethylene (LLDPE), will be integrated with Prime Polymer's domestic PP, LLDPE and high-density polyethylene (HDPE) businesses and its overseas LLDPE manufacturing businesses. The integration is expected to be completed by April 2026. Following the integration, Prime Polymer will have a total output capacity of 1.59mn t/yr for PP and 720,000 t/yr for PE. Sumitomo Chemical's Chiba plant in the eastern Chiba prefecture will also be operated by Prime Polymer. Prime Polymer currently has a production capacity of 1.26mn t/yr for PP and 550,000 t/yr for PE. It owns the Ichihara and Anegasaki plants in Chiba and the Osaka plant in the western Osaka prefecture. The company also jointly owns the Tokuyama PP plant in Yamaguchi prefecture with fellow petrochemical firm Tokuyama. Sumitomo Chemical and Prime Polymer decided to optimise their polymer production to overcome the current oversupply and weak demand in the domestic market. Changes in lifestyle have exacerbated the decline in Japan's plastics demand, while cheaper imports have added to oversupply. The companies also aim to improve profitability of their basic petrochemical businesses by enhancing PE production to strengthen operation of crackers generating PE feedstock ethylene. The partners also target to accelerate their carbon-neutral projects, such as recycled polymers and biomass-based products, through technological collaboration and by combining sales channels to secure off-takers. The integration is also expected to help waste collection for recycled plastic production, Mitsui Chemicals said. Capacity reductions unavoidable Optimisation and capacity reduction for polyolefin are unavoidable, Mitsui Chemicals said. The firm expects domestically produced PP demand in Japan to drop to 1.5mn t/yr in 2050 from 1.93mn t/yr in 2024. The domestic market will have 1.12mn t/yr of PP overcapacity by 2050 if Japan continues to produce at its current capacity of 2.62mn t/yr. The company expects LLDPE demand to fall to 450,000 t/yr in 2050 from 580,000 t/yr in 2024, which means there will be 490,000 t/yr of overcapacity by 2050 without a capacity cut. Japan's current LLDPE output capacity is 940,000 t/yr. For HDPE, the company forecasts demand to drop to 450,000 t/yr in 2050, from 590,000 t/yr in 2024. Japan's current HDPE output capacity is 1.1mn t/yr so domestic producers will need to manage 630,000 t/yr of overcapacity in 2050 if output is not cut. Mitsui Chemicals is considering scrapping one PE and one PP production line in the future to further optimise its polyolefin business. The Japanese petrochemical industry has had to curb its polyolefin output capacities in Japan and overseas as global competition has intensified, especially from Asian and Middle Eastern producers. They have tried to optimise domestic ethylene cracker operations by lower run rates in line with weaker demand. Sumitomo Chemical and Cosmo Energy have agreed to scrap an ethylene cracker in Chiba prefecture in the April 2026-March 2027 fiscal year. Eneos is also considering permanently shutting down one of its two ethylene crackers in the eastern Kanagawa prefecture by the end of 2027-28. Average cracker operating rates have been decreasing and have remained below 90pc since August 2022, data from the Japan Petrochemical Industry Association show. The operating rates during January-July averaged 77.1pc, down by 3.4 percentage points from the same period a year ago. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Japanese firms target 2030 for ethylene capacity cut
Japanese firms target 2030 for ethylene capacity cut
Tokyo, 1 September (Argus) — Japanese chemical companies Asahi Kasei, Mitsui Chemicals, and Mitsubishi Chemical have set 2030 as their target for the potential reduction in ethylene output capacities in west Japan, the companies announced today. The three firms have launched a limited liability partnership (LLP) Setouchi Ethylene LLP on 19 August. It will study potential output capacity reductions and carbon neutrality of their two ethylene production facilities in west Japan by 2030, they said. Asahi Kasei and Mitsubishi Chemical have a 567,000 t/yr naphtha-fed ethylene cracker in the Okayama prefecture, and Mitsui Chemicals has a 500,000 t/yr naphtha-fed ethylene cracker in the Osaka prefecture, both in west Japan. The partnership will also discuss whether the companies will scrap one of the two crackers or downsize their production capacities, a company spokesperson told Argus . Each of the three companies has provided ¥500,000 ($3,400) to make a total capital of ¥1.5mn for the partnership. The firms are considering jointly operating the ethylene production facilities in west Japan as part of capacity optimisation plans by 2030, and the partnership will explore an ideal model for their joint operating entity. The three companies previously announced in May 2024 plans to co-operate on the decarbonisation of the two ethylene production facilities. The firms considered introducing biomass feedstocks such as biomass-based naphtha, which the newly established LLP will discuss as part of their decarbonisation initiatives. Japanese ethylene producers have been facing challenges because of weakening domestic demand and China's production capacity expansions. This has prompted them to consider restructuring their business. Japanese energy company Cosmo Energy has decided to scrap subsidiary Maruzen Petrochemical's cracker in east Japan's Chiba prefecture in the April 2026-March 2027 fiscal year. Fellow refiner Eneos is also considering decommissioning one of the two crackers at its Kawasaki refinery near Tokyo by the end of the April 2027-March 2028 fiscal year. Mitsui Chemicals and refiner Idemitsu are also consider scrapping Idemitsu's cracker in Chiba by the 2027-28 fiscal year. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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