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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.
June Europe olefins contracts settled lower
June Europe olefins contracts settled lower
London, 31 May (Argus) — The June monthly contract prices (MCPs) for European ethylene and propylene were agreed today at €1,220/t and €1,105/t, respectively. Both MCPs fell by €30/t from the previous month, in line with the monthly change in naphtha prices, the feedstock for the majority of European cracker production. The decrease in average naphtha prices between May and April was €31/t, according to Argus assessments of naphtha para 65 cif NWE, with another commonly used index heard to be showing a similar decrease of just less than €30/t. The propylene MCP was agreed first, arriving promptly on the last working day of May after apparently straightforward negotiations between individual buyers and sellers. Producers had hoped to hold on to some of the fall in naphtha costs, but with spot prices easing in May and a more cautious demand outlook, buyers wanted at least the feedstock change passed through. The ethylene settlement followed soon after propylene. Ethylene supply is slightly on the longer side with producers balancing relatively firmer demand for some co-products with managing the ethylene balance. Spot prices have been steady at discounts close to 40pc of the MCP and producers are choosing to ease back production rather than sell at lower prices. Similarly, they were unwilling to go beyond the feedstock movement for the June MCP because of weak margins and the risk of oil prices reversing some of their significant falls in May. The European MCPs for ethylene and propylene are reference prices used by the industry as benchmarks for long-term contract pricing. Net prices paid vary based on individually negotiated pricing structures, including discounts to the MCPs. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US ethane supply gains seen trailing demand growth
US ethane supply gains seen trailing demand growth
Houston, 23 May (Argus) — Export and domestic demand growth for US ethane is expected to outpace US supply growth by as much as 72,000 b/d by 2026, according to a recent forecast from consultancy East Daley Analytics. A surplus of US ethane production, bolstered by gains in natural gas drilling and production to meet growing demand for electricity generation and LNG exports, has led to increasing investments in additional ethane export terminal capacity to provide other outlets for the petrochemical feedstock. The US Energy Information Administration (EIA) showed US ethane production from natural gas processing rose to a record 2.78mn b/d in October of 2023 and fell to 2.69mn b/d in February, the latest data the agency has available. Those volumes don't take into account ethane that is rejected into the gas stream at processing plants during periods of restrained capacity or when natural gas prices spike on weather-related outages, incentivizing lower ethane recovery. Mont Belvieu, Texas, EPC ethane's premium relative to its natural gas fuel value at Waha reached a peak of 50.31¢/USG on 6 May, a 16-month high, and has averaged 26.08¢/USG in May so far, according to Argus data. As ethane margins versus natural gas rise, ethane extraction at natural gas processing plants becomes even more profitable, pushing ethane recovery rates higher. Yet East Daley's forecasts suggest projects to absorb this additional feedstock may quickly outpace production. The consultancy projects US ethane production will rise by 283,000 b/d by 2026, driven mostly by gains in natural gas production in the Permian and Marcellus basins. Increased gas takeaway capacity from the completion of maintenance on Kinder Morgan's Permian Highway pipeline (PHP), the Gulf Coast Express (GCX) pipeline, and the Transwestern pipeline at the end of this month, will allow for higher levels of ethane rejection, according to Rob Wilson, East Daley's vice president of analytics, limiting potential gains in ethane production from the additional gas. Further gas capacity restrictions in the Permian are expected to be mitigated when the 2.5 Bcf/d Matterhorn Express pipeline — which runs from the Waha, Texas, gas hub to Katy, Texas, on the Gulf coast — comes online in the third quarter of this year. Domestic demand for ethane is projected to rise by 129,000 b/d by 2026 with the addition of Chevron Phillips Chemical's joint venture with QatarEnergy to construct a 2mn t/yr ethane cracker on the Texas Gulf coast that is scheduled to come online in 2026. That joint venture will consume 118,000 b/d of ethane when at full capacity, but will operate at 50pc of capacity when first on line in 2026, according to East Daley. Increased US ethane cracking will come on top of a 231,000 b/d increase in ethane exports by 2026, driven by demand from Chinese crackers and burgeoning demand from Indian crackers, according to the consultancy. Ethane export expansions at Energy Transfer's Marcus Hook terminal in Pennsylvania and Enterprise Products Partners' new flexible LPG and ethane terminal at Beaumont, Texas, are expected to be complete by 2025 and 2026, respectively. Combined, these projects add another 360,000 b/d of ethane demand by 2026, outstripping expected supply growth by an estimated 72,000 b/d, according to East Daley's forecast. By Abby Downing-Beaver Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Philippines' JG Summit delays cracker restart
Philippines' JG Summit delays cracker restart
Singapore, 14 May (Argus) — The Philippines' sole cracker operator JG Summit has delayed the restart of its Batangas cracker by another week because of technical glitches. The cracker was shut on 9 May on technical issues and was scheduled to restart over the weekend of 10 May, but this has been delayed again to the weekend of 17 May because of other technical glitches, according to sources close to the company. JG Summit's cracker has a nameplate capacity of 480,000 t/yr of ethylene and 240,000 t/yr of propylene. Toong Shien Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
JG Summit shuts Philippine cracker on technical issues
JG Summit shuts Philippine cracker on technical issues
Singapore, 10 May (Argus) — The Philippines' sole cracker operator JG Summit shut its Batangas naphtha cracker on 9 May because of technical issues. The cracker, which can produce up to 480,000 t/yr of ethylene and 240,000 t/yr of propylene, is expected to restart this coming weekend, sources close to the company told Argus . It also shut associated units — a 70,000 t/yr butadiene extraction unit and an aromatics plant with nameplate capacities of 90,000 t/yr of benzene, 50,000 t/yr of toluene and 30,000 t/yr of mixed xylenes — along with the cracker. These are also expected to return this weekend. JG Summit is keeping its downstream units running by drawing feedstock from its inventories. The producer has a 320,000 t/yr linear-low density polyethylene/high-density polyethylene (HDPE) swing plant, a 250,000 t/yr HDPE unit and a 300,000 t/yr polypropylene line at the same site. By Toong Shien Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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