Asia Ethylene Prices Recover as Crude and Naphtha Turn Bullish

Asian ethylene prices moved higher this week, recovering the losses recorded over the previous two weeks as crude oil and naphtha rebounded sharply. At the same time, reduced cracker operating rates across the region kept spot availability relatively tight.

The Asian olefins market has remained heavily influenced by movements in crude and naphtha rather than underlying demand. Fluctuating US-Iran peace negotiations have repeatedly caused sharp movements in oil prices, creating significant volatility across downstream olefin markets.

October Brent crude futures rallied strongly and settled at $88.98/bbl on Wednesday, following gains of more than 5% on Monday.

In mid-July, the breakdown of the US-Iran ceasefire had pushed crude, naphtha and Asian olefin prices sharply higher. Prices later weakened as a pause in the conflict raised hopes that tensions could ease and Middle Eastern oil flows could resume. This led to a fall in crude and naphtha, reversing part of the earlier gains. However, crude moved back toward $90/bbl this week as expectations for a lasting peace agreement weakened again.

Trading activity in the ethylene market remained limited. Buyers have been present since late last week, but the rally in crude and naphtha reduced the number of firm offers available. Selling indications moved significantly higher, while bids remained comparatively lower.

The premium for CFR Northeast Asia over CFR Southeast Asia also narrowed to around $40/ton, as Southeast Asian prices recorded stronger weekly gains.

Ethylene Price Snapshot

CFR China
Latest Price: $1,000/ton
Weekly Change: ▲ $20/ton
Bid Range: $960-980/ton
Offer Range: $1,070-1,100/ton

CFR Southeast Asia
Latest Price: $960/ton
Weekly Change: ▲ $40/ton
Bid Range: $930-950/ton
Offer Range: $1,050-1,100/ton

Northeast Asia Prices Gain on Trading Demand

Ethylene prices in Northeast Asia and China recovered this week as renewed buying interest from traders coincided with stronger crude futures and rising naphtha costs.

Chinese traders were seeking ethylene and propylene cargoes for August delivery to meet contractual requirements. Most end users, however, remained focused on term contract discussions and continued to prefer floating-price arrangements because of the extreme volatility in crude and naphtha.

Northeast Asian ethylene prices increased by around $20/ton, with traders also reporting tighter spot availability. Market participants noted that further increases in crude and naphtha could push ethylene prices higher.

Asian naphtha strengthened sharply, rising by $48/ton on Tuesday to $809/ton CFR Japan, compared with $761/ton last Friday, an increase of nearly 7%.

Buyers remained cautious about committing to fixed-price deals. The ethylene forward market has also moved into contango, encouraging traders to manage risk through hedging and short-term defensive strategies.

Bids from Chinese traders rose into the $900s/ton CFR China/Northeast Asia, while selling indications moved above $1,050/ton, leaving a gap of around $100/ton and restricting fixed-price business.

Floating-price deals were reported at premiums of $15-25/ton over CFR Northeast Asia assessments for deliveries to China and Korea. Several Chinese traders were also reported to have purchased local cargoes for August requirements.

Sinopec kept its ethylene list price unchanged at CNY8,000/ton. Spot prices in East China and Shandong initially declined by CNY300-400/ton to CNY7,600-7,700/ton before recovering to around CNY7,900-8,100/ton later in the week.

Northeast Asia Supply Remains Restricted

Ethylene availability across China, South Korea, Japan and Taiwan remains constrained as many crackers continue to operate below normal rates. High naphtha costs, uncertainty over feedstock flows through the Strait of Hormuz and ongoing industry restructuring continue to limit operating rates.

Taiwanese supply remains particularly tight, with several major crackers running at reduced rates or remaining offline.

CPC – Linyuan, Taiwan
Capacity: 720,000 TPA Ethylene
Unit: No. 3 Naphtha Cracker
Status: Operating rate reduced to 70% in July due to feedstock concerns.

CPC – Linyuan, Taiwan
Capacity: 385,000 TPA Ethylene
Unit: No. 4 Naphtha Cracker
Status: Shut in April due to compressor issues; restarted in late May and currently operating at 70%.

CPC – Kaohsiung, Taiwan
Capacity: 700,000 TPA Ethylene
Unit: No. 6 Naphtha Cracker
Status: Shut since early October 2025; restart date remains unconfirmed.

Formosa Petrochemical Corp – Mailiao, Taiwan
Capacity: 700,000 TPA Ethylene
Unit: No. 1 Naphtha Cracker
Status: Shut since early October 2025; no confirmed restart date.

Formosa Petrochemical Corp – Mailiao, Taiwan
Capacity: 1.035 Million TPA Ethylene
Unit: No. 2 Naphtha Cracker
Status: Operating rate reduced to 70% because of feedstock concerns.

Formosa Petrochemical Corp – Mailiao, Taiwan
Capacity: 1.20 Million TPA Ethylene
Unit: No. 3 Naphtha Cracker
Status: Shut at the end of June for a planned 60-day turnaround; restart expected around the end of August.

Southeast Asia Records Stronger Gains

Southeast Asian ethylene prices increased more sharply than those in Northeast Asia, supported by higher regional prices and the bullish energy market. This stronger increase narrowed the price gap between the two regions.

SEA traders were active in discussions for both fixed-price and floating-price cargoes, although producers continued to favour floating-price deals due to the ongoing volatility in crude and naphtha. End users remained largely focused on term contract negotiations.

Spot cargoes from Southeast Asia, South Korea and China were available, but suppliers remained cautious. Firm fixed-price offers became increasingly limited as sellers sought protection from sudden feedstock price movements.

Selling indications remained above $1,050/ton CFR Southeast Asia, while notional buying ideas were heard in the mid-$900s/ton. Floating-price bids for August delivery were indicated at flat levels to premiums of around $10-15/ton.

Supply in Southeast Asia is expected to remain restricted through August because of reduced operating rates and ongoing maintenance.

PRefChem’s two 70,000 bbl/day RFCC units were shut in early July due to technical issues. Its 1.29 million TPA Pengerang cracker, which restarted in mid-June, continues to operate at around 60-70%.

Rayong Olefins’ 900,000 TPA Map Ta Phut cracker has remained shut since early March, with a tentative restart planned for September.

Aster Chemicals & Energy’s 1.15 million TPA Pulau Bukom cracker had been operating at around 50-60% and is scheduled for a one-month maintenance shutdown in August.

PT Lotte Chemical Indonesia has reduced operating rates at its 1 million TPA Cilegon cracker to around 50-55%, compared with approximately 65% previously, due to feedstock concerns. ExxonMobil’s older 900,000 TPA Jurong cracker has remained shut since March.

With cracker operating rates reduced and spot supply constrained, the recovery in crude and naphtha is providing strong support to Asian ethylene prices. However, extreme feedstock volatility and cautious end-user demand are likely to keep trading conditions challenging.

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