Asia Ethylene Prices Rebound Sharply as Rising Oil Strengthens Market Sentiment

Asian ethylene markets posted their strongest weekly recovery in months as higher crude oil and naphtha prices lifted production costs across the region. After nearly three months of steady declines, the market turned upward as renewed geopolitical tensions in the Middle East raised concerns about feedstock availability and encouraged suppliers to increase spot offers.

Unlike propylene, which reacted immediately to the latest surge in oil prices, ethylene lagged initially before catching up this week. As crude continued to strengthen, naphtha values climbed sharply, pushing cracker production costs significantly higher. While suppliers responded with higher asking prices, many buyers remained cautious, resulting in limited spot transactions due to a wide gap between bids and offers.

The premium for Northeast Asia over Southeast Asia also widened as prices in Northeast Asia increased at a faster pace, supported by tighter supply and stronger forward market expectations.

Ethylene Market Snapshot

CFR China

Latest Price: $950/ton
Weekly Change: ▲ $140/ton
Buyer Indications: $920–930/ton
Seller Offers: $1,020–1,070/ton

CFR Southeast Asia

Latest Price: $900/ton
Weekly Change: ▲ $100/ton
Buyer Indications: $880–900/ton
Seller Offers: $1,000–1,050/ton
Southeast Asia follows higher feedstock costs

Ethylene prices in Southeast Asia rose sharply as soaring naphtha costs encouraged suppliers to revise offers upward. However, trading activity remained slow because buyers were unwilling to match the rapid increase in asking prices. Many market participants described the current market as highly volatile, with sellers frequently revising or withdrawing offers as energy prices continued to fluctuate.

Although several cargoes from Southeast Asia, China, Japan, and South Korea remained available, negotiations were difficult due to the large difference between buyer bids and seller expectations. Industry sources also noted that, despite the recent rally, current ethylene prices are still below estimated production costs, leaving many producers with weak margins.

On the supply side, regional availability has improved slightly following the restart of several cracker units, though a number of major facilities across Southeast Asia continue to operate at reduced rates or remain offline, preventing any significant oversupply.

Northeast Asia outperforms on tighter supply

Northeast Asia recorded even stronger gains during the week as higher feedstock costs combined with tighter prompt supply supported prices. Ongoing maintenance at several crackers and reduced operating rates at multiple plants limited spot availability, while stronger domestic pricing in China added further support.

Chinese producers raised local prices, and domestic spot markets strengthened alongside international offers. Market participants also pointed to continuing concerns over feedstock security, prompting several producers across China, South Korea, and Taiwan to maintain conservative operating rates.

Major Plant Updates

Sinopec SK Wuhan Petrochemical – Wuhan, China

Capacity: 1.1 million tons/year
Product: Ethylene
Status: Under maintenance since early June with a planned 45-day turnaround.

Wanhua Chemical – Yantai, China

Capacity: 1.2 million tons/year
Product: Ethylene
Status: Unit remains shut; restart schedule has not been confirmed.

Fujian Refining & Petrochemical – Quanzhou, China

Capacity: 1.0 million tons/year
Product: Ethylene
Status: Operating at around 70% due to feedstock constraints.

Zhejiang Petrochemical – Zhoushan, China

Capacity: 1.4 million tons/year
Product: Ethylene
Status: Running at approximately 80% because of feedstock concerns.

Sinopec Hainan Petrochemical – Yangpu, China

Capacity: 1.0 million tons/year
Product: Ethylene
Status: Maintenance shutdown continues; restart date remains uncertain.

PetroChina Guangxi Petrochemical – Qinzhou, China

Capacity: 1.2 million tons/year
Product: Ethylene
Status: Operating at reduced rates due to limited feedstock availability.

Shenghong Petrochemical – Lianyungang, China

Capacity: 1.1 million tons/year
Product: Ethylene
Status: Currently under maintenance with no confirmed restart timeline.
Outlook

The recent rally has improved overall market sentiment, but sustained gains will depend on how crude oil and feedstock prices evolve in the coming weeks. While tighter regional supply is offering support, buyers remain cautious due to high prices and uncertain downstream demand. Unless energy markets stabilize and trading activity improves, volatility is expected to remain a key feature of the Asian ethylene market.

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