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Reuters
19-05-2025
- Business
- Reuters
Asian petrochemical producers chase ethane gains as margins dwindle
NEW DELHI, May 19 (Reuters) - Several petrochemical producers in Asia plan to reconfigure their crackers to process more ethane to reduce costs and capitalise on rising U.S. supplies as they face thin margins and global oversupply, company executives said. These include South Korea's largest cracker operator YNCC and SP Chemicals in China. In Japan, Mitsui Chemicals is studying the use of ethanol at existing crackers. The change will allow operators to keep their feedstocks flexible with U.S. ethane exports forecast to rise by about 7% in 2025. Ethane, a byproduct of shale gas, is typically cheaper than the more widely used naphtha. South Korea's YNCC is re-evaluating its investment plans to improve cost efficiency at its crackers, which have been running at minimum utilisation rates of 70–80% so far this year, its CEO You-Jin Lee said at the Asia Petrochemical Industry Conference (APIC) in Bangkok last week. "One of the ways we can do it is by increasing (the) use of ethane," said Lee. In China, SP Chemicals is studying plans to increase ethane use at its petrochemical complex in eastern China's Jiangsu province to up to 90% from 75%. "Flexible crackers will ultimately be the fittest to survive when margins are plunging," said a source at an east-China naphtha cracker who declined to be named because they were not authorised to speak to the media. "New entrants into the market will want to import cheap U.S. ethane," Armaan Ashraf, global head of natural gas liquids, at consultancy FGE, said, referring to petrochemical projects in the Middle East, Russia and Asia. Thailand's PTT Global Chemical will begin to use U.S.-ethane as an alternative feedstock at its petrochemical complex, securing 400,000 tons annually starting in 2029, the company said in a report released at APIC. In Europe, where global chemical giants have announced closures due to high operating costs and weak margins, INEOS is building a 1.45 million tons per year cracker, the U.S. Energy Information Administration said in its May 6 report. EIA expects this project to utilise up to 75,000 barrels per day of ethane when it comes online in mid-2026. Other importers, such as India, will have to build infrastructure including storage and ships to boost the use of ethane at their plants, an Indian industry source said. For example, ONGC ( opens new tab is seeking partners to build large ethane carriers to ship in 800,000 metric tons per year from May 2028 for its western India petrochemical plant. EIA expects U.S. ethane production to rise to a new record 3.1 million bpd in 2026 from 2.9 million bpd in 2025. This will increase U.S. exports to 540,000 bpd in 2025 and 640,000 bpd in 2026, EIA said. EIA expects Wanhua Chemical's newly started cracker in eastern China's Yantai city, which can process ethane or naphtha, to add 50,000-75,000 bpd of U.S. ethane export demand this year.
Yahoo
29-04-2025
- Business
- Yahoo
Exclusive-China waives tariffs on US ethane imports, sources say
SINGAPORE (Reuters) -China has waived the 125% tariff on ethane imports from the United States imposed earlier this month, two sources with knowledge of the matter said on Tuesday. The move will ease pressure on Chinese firms that import U.S. ethane for petrochemical production as well as provide an outlet for the natural gas liquid, a byproduct of U.S. shale gas production. Ethane importers in China include Satellite Chemical, SP Chemicals, Sinopec, Sanjiang Fine Chemical and Wanhua Chemical Group while the key U.S. exporters are Enterprise Products Partners and Energy Transfer. China buys nearly half of U.S. ethane exports, according to the U.S. Energy Information Administration. China increased its levies on imports of U.S. goods, including ethane, to 125% earlier this month, hitting back at U.S. President Donald Trump's decision to single out the world's No.2 economy for higher duties. The sources said the tariff on ethane had been waived in recent days. Beijing has already granted tariff exemptions on some products including pharmaceuticals, microchips and aircraft engines and was asking firms to identify critical goods they need levy-free, Reuters reported on Friday. Sign in to access your portfolio
Reuters
29-04-2025
- Business
- Reuters
Exclusive: China waives tariffs on US ethane imports, sources say
SINGAPORE, April 29 (Reuters) - China has waived the 125% tariff on ethane imports from the United States imposed earlier this month, two sources with knowledge of the matter said on Tuesday. The move will ease pressure on Chinese firms that import U.S. ethane for petrochemical production as well as provide an outlet for the natural gas liquid, a byproduct of U.S. shale gas production. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. Ethane importers in China include Satellite Chemical ( opens new tab, SP Chemicals, Sinopec ( opens new tab, Sanjiang Fine Chemical ( opens new tab and Wanhua Chemical Group ( opens new tab while the key U.S. exporters are Enterprise Products Partners (EPD.N), opens new tab and Energy Transfer (ET.N), opens new tab. China buys nearly half of U.S. ethane exports, according to the U.S. Energy Information Administration. China increased its levies on imports of U.S. goods, including ethane, to 125% earlier this month, hitting back at U.S. President Donald Trump's decision to single out the world's No.2 economy for higher duties. The sources said the tariff on ethane had been waived in recent days. Beijing has already granted tariff exemptions on some products including pharmaceuticals, microchips and aircraft engines and was asking firms to identify critical goods they need levy-free, Reuters reported on Friday.
