Morning Briefing - 23 Apr. 2025

CommoPlast

Morning Briefing

23 April 2025

Brent: $67.44 (á $1.18)

WTI: $64.31 (á $1.23)

Naphtha CFR Japan: á $4

Ethylene CFR NEA: Stable

Ethylene CFR SEA: Stable

Propylene FOB Korea: Stable

Propylene CFR China: Stable

*Data represent closing prices of the previous trading day

www.commoplast.com     

____________________________________________________________________

Trade war threatens viability of China’s ethane cracking sector

The ongoing US-China trade war is beginning to reverberate across Asia’s petrochemical markets, with the first signs of disruption emerging over the past three weeks. As international suppliers redirect cargoes to bypass Chinese tariffs and waning demand, one vulnerable segment remains under the radar: China’s ethane cracking industry.

Ethane imports from the US — previously the sole supplier to China — are now subject to punitive tariffs of 125%. This sharp escalation in duties has significantly inflated feedstock costs for Chinese ethane crackers, putting pressure on their economic viability.

Unlike propane, which enjoys a more flexible spot market, ethane transactions are predominantly locked into long-term contracts. This rigid structure leaves little room for Chinese operators to secure alternative non-US supply, heightening their exposure to geopolitical risk. The heavy reliance on US-origin ethane in 2023 now casts a shadow over feedstock security for the sector.

Satellite Chemical (STL), a key player in China’s ethane cracking space, has reportedly applied for a tariff exemption on ethane imports. The outcome of the application remains uncertain. STL currently runs two ethane crackers with a combined nameplate capacity of 2.45 million tonnes, and a third unit is scheduled to commence operations in 2026.

___________________________________________________________________ _

Taiwanese PVC Major Holds May Offers Steady, Defying Softer Expectations

A key Taiwanese PVC producer has kept May shipment offers to Asia unchanged from April, resisting regional pricing pressure in a bid to safeguard margins amid persistently high upstream costs. The decision runs counter to market expectations for price relief and raises questions about the supplier’s short-term competitiveness.

Meanwhile, the regional benchmarks continue to soften. In China, FOB values for carbide-based PVC have slipped below the $600/ton mark, effectively setting a new floor for the region and undercutting the Taiwanese major’s price stance.

In India, the market has responded more directly to weakening demand. A leading domestic producer has trimmed its list prices by INR 4,000/tonne (approx. $47/ton), reflecting muted restocking interest following substantial import arrivals in March.

____________________________________________________________________

Follow us on CommoPlast Official Telegram Channel for more: https://t.me/commoplast