Asia Ethylene Extends Eight-Week Slide as Oversupply Pressures Deepen

Asian ethylene prices continued to weaken for the eighth straight week as growing supply, weak downstream demand, and falling feedstock costs kept market sentiment under pressure. The downturn has been particularly severe in Northeast Asia, where increasing spot availability and rising cracker operating rates have accelerated the market correction.

Since early April, ethylene prices in Northeast Asia have dropped by nearly 37%, while Southeast Asian values have fallen by around 30%. The widening gap has pushed the premium of Southeast Asian ethylene over Northeast Asian material to its highest level since October 2024.

Latest Ethylene Market Levels

• CFR China: $950/ton (↓ $40/ton)
Bid Ideas: $900-920/ton
Offer Ideas: $1000-1050/ton

• CFR Southeast Asia: $1050/ton (↓ $30/ton)
Bid Ideas: $1000-1020/ton
Offer Ideas: $1100-1150/ton

China Shifts from Buyer to Seller

A major factor behind the decline has been China's transformation from a key buyer into an active seller of spot ethylene cargoes. Market participants noted that increased availability from Chinese producers and traders has added significant pressure on regional prices.

At the same time, demand across several downstream sectors remains weak. Products such as PE, PP, PVC, Styrene Monomer, MEG, Ethylene Oxide, Acrylonitrile, Cumene, and Phenol continue to face sluggish consumption, limiting buying interest throughout the supply chain.

Higher Cracker Rates Add to Supply Pressure

South Korean producers have steadily increased operating rates since March as margins improved and feedstock availability became more stable. However, unsold inventories and rising spot availability have led sellers to offer cargoes more aggressively.

Spot deals for June delivery were reportedly concluded within the $930-970/ton CFR China/Taiwan range, reflecting the ongoing weakness in the market.

Meanwhile, domestic Chinese prices also softened, with producers lowering list prices and spot market values moving lower during the week.

Key Northeast Asia Plant Updates

• Lotte Chemical (Daesan, South Korea) – 1.1 million tpa cracker operating around 85%. Long-term plans remain in place to eventually shut the facility.

• Hanwha Total (Daesan, South Korea) – 1.39 million tpa cracker increased operating rate to 90%.

• GS Caltex (Yeosu, South Korea) – 900,000 tpa cracker raised run rates to 75-80%.

• HD Hyundai Chemical (Daesan, South Korea) – 900,000 tpa cracker increased operations to around 80%.

• KPIC (Onsan, South Korea) – 800,000 tpa cracker operating near 75%.

• YNCC No.3 (Yeosu, South Korea) – 500,000 tpa cracker scheduled for permanent closure in August 2026.

• ENEOS (Kawasaki, Japan) – 443,000 tpa cracker planned for shutdown by March 2028.

• Idemitsu Kosan (Chiba, Japan) – 414,000 tpa cracker targeted for closure by March 2028.

• Maruzen Petrochemical (Chiba, Japan) – 525,000 tpa cracker expected to close by 2026-27 as production is consolidated elsewhere.

Southeast Asia Faces Additional Supply Growth

Southeast Asian ethylene prices also continued to fall as the region prepares for additional supply from major Malaysian producers.

Market participants expect Malaysia's PRefChem to restart its 1.29 million tpa Pengerang cracker and RFCC units during June. Once operational, additional spot cargoes could become available and place further pressure on regional pricing.

Other regional facilities are also expected to return:

• PRefChem (Malaysia) – Pengerang cracker restart expected in mid-June.

• Petronas No.2 Kertih Cracker (Malaysia) – 600,000 tpa unit likely to restart in late June.

• Rayong Olefins (Thailand) – 900,000 tpa cracker remains offline, with no confirmed restart date.

Market Outlook

With supply increasing across both Northeast and Southeast Asia, while downstream demand remains weak, market participants expect ethylene prices to remain under pressure in the near term. Additional cracker restarts and rising inventories could continue to weigh on sentiment unless demand shows a meaningful recovery.

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