Asia Ethylene Rally Pauses as Tight Supply Keeps Prices Firm

Asian ethylene prices paused after rising for six consecutive weeks, as a correction in crude oil prices pushed regional naphtha values lower at the start of the week. Market participants have remained cautious while monitoring the November crude and naphtha forward curves.

Brent crude briefly moved below the $100/bbl mark before recovering quickly. November Brent fell by $3.53/bbl to $100.34/bbl on Monday and declined another $1.09/bbl to $99.25/bbl on Tuesday, marking its first close below $100/bbl in nearly two weeks. Prices then rebounded by $3.83/bbl to $103.08/bbl on Wednesday as US-Iran talks remained deadlocked and uncertainty surrounding the Strait of Hormuz continued. Brent stayed above $100/bbl on Thursday.

Despite the recent decline in naphtha, Asian olefin supply remains limited. Production costs for most naphtha crackers in the region are still elevated because the feedstock correction occurred only recently. South Korean producers are also reportedly considering additional cracker operating-rate reductions for November, although current rates are already relatively low.

A Western trader said recent volatility in crude, together with lower Asian naphtha and propane prices, has not removed concerns over feedstock security for the fourth quarter of 2026. Most Asian petrochemical participants continue to expect significant volatility in the near to medium term.

Ethylene Price Snapshot

CFR China

Latest price: $1200/ton

Bid: $1170-1200/ton

Offer: $1260-1300/ton

CFR Southeast Asia

Latest price: $1150/ton

Bid: $1120-1140/ton

Offer: $1250-1280/ton

Ethylene prices in Northeast Asia and China remained stable despite the early-week decline in naphtha. Spot demand for October is healthy, while most first-half October requirements have already been covered.

Spot ethylene has increased by around $70/ton over the past two weeks and is approximately 22% higher than in mid-August. Trader bids have generally remained around last week's levels, while offers are limited.

Some South Korean cargoes were reported at $1190-1210/ton CFR China for October arrival. Another cargo from South Korea was offered on an FOB basis at a $10-20/ton premium to CFR Northeast Asia assessments under a floating formula.

Chinese buyers have been showing bids slightly below $1200/ton CFR China/Northeast Asia, while offers have generally remained above $1250/ton.

Asian naphtha was assessed at $905/ton CFR Japan, down from $965/ton on the previous Tuesday, representing a decline of around 6.5%.

Most end users are currently relying on contractual supplies rather than actively purchasing spot cargoes. The forward curve remains in contango.

A South Korean trader estimated that naphtha at $850-900/ton plus around $250/ton in production costs would put ethylene breakeven levels at approximately $1100-1150/ton. With naphtha around $902/ton and potentially moving toward $850/ton, production costs could ease if ethylene prices remain around $1200/ton CFR Northeast Asia.

Sellers continue to favor floating-price formulas, with selling ideas around $40-50/ton above CFR Northeast Asia assessments, while buyers are seeking single-digit premiums. Sellers are also defending a floor near $1200/ton, with fixed-price deals targeted at $1250/ton or higher CFR Northeast Asia.

For October, formula-based deals in China and South Korea are being discussed at premiums of around $10-25/ton to CFR Northeast Asia.

Sinopec raised its ethylene list price by CNY400/ton to CNY9400/ton, while spot prices in East China and Shandong increased by CNY200-300/ton to CNY9200-9500/ton.

Northeast Asia Supply Remains Tight

Ethylene availability across Northeast Asia is expected to remain constrained through October, with supply limitations reported in South Korea, Taiwan, Japan and China.

Taiwan

Formosa No. 3: 1.2 million tons/year; restarted in early September

Formosa No. 2: 1.035 million tons/year; expected to restart in late September/early October

Formosa No. 1: 700,000 tons/year; offline since October 2025 with no restart planned

China

Wanhua Yantai: 1.2 million tons/year; maintenance extended, offline since May

CNOOC/Shell Huizhou: 1 million tons/year; two-month maintenance began in early August

Zhejiang Petrochemical Zhoushan: 1.4 million tons/year; operating at 70-80% because of feedstock and profitability pressures

South Korea

LG Chemical: 1.3 million tons/year; planned maintenance from mid-October for around 45 days

KPIC: 800,000 tons/year; planned maintenance around the same period for approximately 40 days; currently operating at 65%

Southeast Asia Ethylene Market

Southeast Asian spot ethylene prices were broadly stable. The earlier bullish momentum has weakened, but limited availability continues to prevent a significant price decline.

Spot trading remains limited as end users and converters are largely covered through term contracts. Market participants are discussing October-loading cargoes under both fixed-price and floating-price structures.

Spot ethylene has increased by around $40/ton over the past two weeks.

A Singapore-based trader estimated the Northeast Asia-Southeast Asia price gap at around $50/ton, reflecting tighter conditions in Southeast Asia. With naphtha down around $60/ton to approximately $905/ton, the trader considered $1150-1160/ton CFR Southeast Asia reasonable, with an estimated breakeven around $1150/ton.

Southeast Asian producers could continue reducing operating rates until ethylene prices approach $1250/ton if naphtha remains at or below $900/ton.

Cargoes from Southeast Asia, South Korea and China are being discussed on both fixed and floating terms. Producer offers are around $40-50/ton above CFR Southeast Asia, while fixed-price offers remain above $1250/ton and buyer bids are around $1130-1140/ton.

Southeast Asia Plant Updates

PRefChem Pengerang, Malaysia

Ethylene capacity: 1.29 million tons/year

Status: Restarted in mid-June

Operating rate: 60-70%

PRefChem RFCC units, Malaysia

Capacity: 70,000 barrels/day

Status: Two units restarted in late July

Operating status: Reduced rates

Aster Chemicals & Energy, Pulau Bukom, Singapore

Ethylene capacity: 1.15 million tons/year

Status: Restarted after its August turnaround

Operating rate: 50-60%

PT Lotte Chemical Indonesia, Cilegon

Ethylene capacity: 1.0 million tons/year

Operating rate: 50-55% due to feedstock and margin pressures

PT Chandra Asri Pacific Tbk, Cilegon

Ethylene capacity: 0.90 million tons/year

Operating rate: 60-65% amid the US-Iran war

ExxonMobil Jurong, Singapore

Cracker capacity: 0.90 million tons/year

Status: Permanently shut

Shutdown period: March-June 2026

Long Son Petrochemical, Vietnam

Ethylene capacity: 1.0 million tons/year

Status: Shut since mid-May ahead of an ethane project

Expected startup: Q3 2027

Rayong Olefins, Thailand

Ethylene capacity: 0.90 million tons/year

Status: Restarted in mid-September after a long turnaround that began in early March

Operating rate: 80%

Overall, the correction in Asian naphtha has temporarily reduced cost pressure, but tight ethylene availability and ongoing plant constraints continue to provide support to regional prices. Crude movements, feedstock costs and upcoming cracker maintenance will remain key factors for the Asian ethylene market through October.

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