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.
S Korea starts review of Lotte Chemical, YNCC merger
S Korea starts review of Lotte Chemical, YNCC merger
Singapore, 20 March (Argus) — South Korea's Ministry of Trade, Industry and Resources (Motir) and the Korea Fair Trade Commission have started a preliminary review of Lotte Chemical's proposed merger with Yeochun NCC (YNCC) as part of the country's initiative to restructure the petrochemical segment. Under the proposed plan, Lotte Chemical will spin off part of its petrochemical operation in Yeosu, including its cracker and downstream units, establishing a new entity which will be merged with YNCC. For the downstream sector, the shareholders of YNCC — DL Chemical and Hanwha Solutions — will sell part of their downstream assets to YNCC. After the merger, Lotte Chemical, DL Chemical and Hanwha Solutions will each hold one-third stake in YNCC. The new business will focus on producing high value-added products, including linear density polyethylene (LDPE) and polyolefin elastomer (POE) for medical use, according to a statement released by Motir. This is the second merger review Motir is conducting after South Korea initiated a restructuring plan for its petrochemical industry to slash 2.7–3.7 mn t/yr of ethylene capacity, or up to 25pc of their total cracking capacity on August 2025 . Motir first approved the merger plan between Hyundai Chemical and Lotte Chemical in Daesan in February. Lotte Chemical owns two crackers in South Korea — one in Yeosu with an ethylene capacity of 1.2 mn t/yr, and another in Daesan with ethylene capacity of 1.05 mn t/yr. YNCC operates three crackers in Yeosu — its No.1 cracker can produce up to 900,000t/yr ethylene, while its No. 2 and No. 3 crackers produce 915,000t/yr and 500,000t/yr of ethylene, respectively. YNCC's No. 3 cracker has been idled since August 2025 because of margin concerns. Hanwha Solutions operates a 1.458 mn t/yr ethylene dichloride plant in Yeosu alongside a 330,000t/yr LDPE plant, and a 355,000t/yr linear low-density PE /high-density PE (LLDPE/HDPE) swing plant. Daelim has a 305,000t/yr HDPE unit and a 400,000t/yr LLDPE/HDPE swing plant in Yeosu. The petrochemical industry in Asia has been suffering from negative margins since 2022 because of oversupply from expanding capacities in the region, especially in China. Weak downstream demand has further weighed on production margins, putting pressure on cracker operators since early 2022 . By Toong Shien Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Japan’s petchem firms to raise PE, PP sales prices
Japan’s petchem firms to raise PE, PP sales prices
Tokyo, 19 March (Argus) — Japan's polymer producers Japan Polyethylene, Japan Polypropylene and Prime Polymer will raise their polyethylene (PE) and polypropylene (PP) sales prices starting from April delivery, the firms have announced. Japan Polyethylene plans to raise all its PE sales prices by more than ¥90/kg ($0.56/kg), while Japan Polypropylene aims to increase all its PP sales prices by more than ¥80/kg, the companies said on 19 March. Fellow polymer producer Prime Polymer will also raise its PE and PP sales values by more than ¥90/kg starting from April, the firm announced on 17 March. The companies foresee domestic naphtha prices to rise above ¥100,000-110,000/kl along with surge in crude oil prices, due to the US-Israel war with Iran. The increases are larger than the price hikes of more than ¥45/kg in March 2022 for both Japan Polyethylene's PE and Japan Polypropylene's PP, in response to Russia's invasion of Ukraine. Prime Polymer's price increases are also larger than its previous PE and PP price hikes in March 2022 which were over ¥35/kg. Japan Polyethylene and Japan Polypropylene also expect shortages of feedstock ethylene and propylene to impact polymer production. But they declined to disclose further details of their manufacturing situations, including current plant operating rates and output volumes. Prime Polymer also cited the uncertainty of naphtha and consequently its procurement of feedstock ethylene and propylene. But the company did not respond to Argus ' inquiry for further details. Japan Polyethylene has low-density PE output capacity of 562,000 t/yr and high-density PE production capacity of 423,000 t/yr, according to the Japanese ministry of economy, trade and industry (Meti)'s latest survey as of the end of 2024. The firm is held 58pc by Mitsubishi Chemical's wholly-owned subsidiary Japan Polychem and 42pc by petrochemical firm Japan Polyolefine, a joint venture of refiner Eneos and petrochemical firm Resonac. Japan Polypropylene owns PP production capacity of 765,000 t/yr, Meti's survey shows. The company is held 65pc by Japan Polychem and 35pc by JNC Petrochemical, a wholly-owned subsidiary of chemical producer Chisso. Prime Polymer owns manufacturing capacities of 600,000 t/yr PE and 1.26mn t/yr PP. The company is held 65pc by domestic petrochemical producer Mitsui Chemicals and 35pc by refiner Idemitsu. Other Japanese petrochemical companies have faced similar issues. Kaneka will also raise sales prices of its polyvinyl chloride (PVC) by more than ¥35/kg because of rising feedstock costs, while Shin-Etsu has reduced domestic PVC output and will increase domestic sales prices for PVC by more than ¥30/kg. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Japan’s Shin-Etsu reduces domestic PVC production
Japan’s Shin-Etsu reduces domestic PVC production
Tokyo, 17 March (Argus) — Japanese chemical company Shin-Etsu Chemical has reduced domestic polyvinyl chloride (PVC) production and decided to raise domestic sales prices, because of limited supplies of feedstock ethylene. Shin-Etsu will raise domestic sales prices for PVC by more than ¥30/kg ($0.18/kg) starting with deliveries on 1 April, the company said on 16 March. This equates to an increase of approximately 20pc in sales prices, it added. Shin-Etsu has a production capacity of 550,000 t/yr for PVC at its Kashima plant in Ibaraki prefecture, where it receives supplies of feedstock ethylene from petrochemical producer Mitsubishi Chemical's Ibaraki plant. Mitsubishi Chemical has already cut operating rates at its 485,000 t/yr naphtha-fed cracker at the Ibaraki plant because of concerns over naphtha supplies due to the US-Israel war with Iran. Ethylene prices have spiked, and Mitsubishi Chemical has started limiting supply volumes of ethylene, which has forced Shin-Etsu to reduce its PVC production, review sales prices and limit supply volumes, Shin-Etsu said. The company's other products have not been affected by the limited ethylene deliveries, it added. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Equate halts EG-2 unit in Kuwait
Equate halts EG-2 unit in Kuwait
Amsterdam, 9 March (Argus) — Kuwait-headquartered petrochemical producer Equate has temporarily shut down its EG-2 ethylene glycol unit in Shuaiba during the ongoing war between the US/Israel and Iran. The firm suspended output "to safeguard people and operations", the firm said today. Equate operates two ethylene glycol units with capacities of 600,000 t/yr and 550,000 t/yr in Shuaiba, Kuwait, according to Argus data. The firm's notice related only to the EG-2 plant, implying that other units are running, although operations are likely to be affected. Equate operates two steam crackers at the Shuaiba site with a combined 1.85m t/yr ethylene capacity, which supplies the EO/EG units and 890,000 t/yr LLDPE/HDPE capacity. The firm also runs a 1.025mn t/yr ethylene glycol facility in Texas in the US, as well as two sites with a combined capacity of 1.35mn t/yr of ethylene glycol in Canada's Alberta through its subsidiary MEGlobal. Exports of ethylene glycol from the Mideast Gulf were effectively halted by the war, with tanker traffic through the strait of Hormuz — the main route for Mideast Gulf crude, LNG and petrochemicals exports — almost at a standstill since the US and Israel began launching air strikes on Iran on 28 February. Tehran has responded by attacking other countries in the region, including targeting oil and gas infrastructure and shipping. Kuwait supplies most of its monoethylene glycol (MEG) to Asia, mainly to India, China and Pakistan. The country exported over 1.2mn t of MEG in 2025, Global Trade Tracker data show. India received 548,000t or 45pc of total exports, while China and Pakistan took 402,000t and 165,000t, representing 33pc and 14pc of exports, respectively. By Liana Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Spotlight content
Browse the latest thought leadership produced by our global team of experts.
