Singapore (Reuters) – Despite an increasing trade war between Washington and Beijing, imports of ethane into China from the United States should increase this year while major petrochemical producers are fighting against profits in profits pass to the raw material from the American shale gas boom.
Companies such as Chemical Satellite, China Sanjiang Fine Chemical and Wanhua Chemical Group invest more than $ 16 billion to build crackers, improve factories, extend storage and build very large ethane carriers to ship liquefied gas.
American export capacity and the lack of oil tankers are the two factors that retain the growth of ethane trade between the two largest economies in the world. Almost all of China’s ethane imports come from the United States
The forecasts of three analysts for imports of ethane into China in 2025 are between 6.3 million and 8.2 million tonnes, which, according to them, would represent an increase between 9% and 34%. There are no official data accessible to the public on ethane imports.
To meet the increase in export demand, partners of American pipeline networks operators and business products partners increase the capacity to their terminals.
“The bottleneck is American exports at the moment,” said Armaan Ashraf, head of natural gas liquids at the FGE council.
China buys almost half of the US exports from Ethane, according to the US Energy Information Administration, which sees exports of American net ethane increase by 6% to 520,000 barrels per day (11.2 million tonnes) in 2025, he said in an October report. China should take most of this increase, said an EIA analyst.
In competition with China, Thailand plans to buy more American ethane to reduce its trade deficit with the United States, while Siam Cement Group reinfigmeting its new Cracker Long in Vietnam to use the cheaper raw material. Formosa Petrochemistry of Taiwan, the largest importer of Naphtha in the region, also studies the importation of American ethane for its crackers, its spokesperson told Reuters.
The growing demand and the limited export capacity will result in a tight ethane market from 2026, said Wang Yan, analyst of the ICIS goods intelligence company.
New crackers and ships
Between 2024 and 2026, Chinese companies plan to add at least 7.7 million tonnes per year (TPY) to treat ethane and other gas liquids, according to the company’s deposits because they seek to take advantage of the cheaper raw material.
They must make the change to improve their yields. Crackles in China ethane Treatment can harvest $ 300 at $ 500 per tonne of product ethylene, beating the beneficiary margins in the Naphtha treatment factories, said Cheryl Liu, analyst at Consultancy Energy aspects.
Sanjiang Chemical declared in its financial report in first half 2024 that the start of its mixed food cracker reduced its costs by a fifth and overthrew its production of ethylene / ethylene glycol oxide.
In addition to plant improvements, a new shipping capacity is required. For each million tonnes per year in cracking capacity, at least six dedicated VLECs are necessary to send the raw material, said Ashraf.
A VLEC costs $ 160 million at $ 170 million and takes three years to build, Iino line leaders said. The operator rented its first two VLECs to be completed this year to the private British group Ineos to send American ethane to China.
Wanhua Chemical, who has three VLECs, will add two others to three oil tankers by the end of the year, said that a familiar source with the question that refused to be appointed because he is not allowed to speak to the media.
“The main constraint is shipping,” he said, because Chinese shipyards are entirely reserved in the coming years.
He estimated that there are 29 VLECs in service and expects the growth in China demand to follow the new ships.
“There is a lot of demand, but many ships also arrive. And as the main importers will be China and the exporter (East) in the United States, there is the political question between the United States and China. So we have to be careful, “Iino Kaiun Kaisha’s GNL team said in an e-mail response to Reuters.
However, some Jim Teague business analysts and CEO have played the probability that ethane will be affected by Tit-For-Tat prices between Beijing and Washington, because China would prefer to maintain inexpensive raw materials to support the industry .
“The entire segment is not doing very well. There are always other sectors on which they can operate with regard to the trade war,” said Ashraf de Fge.
China lowered its import rate for ethane in 2025 to 1% compared to 2% in 2024.
Teague said Chinese propane and ethane users depend on imports. “So, from the LGL point of view, I am not worried,” he told analysts on February 4, referring to natural gas liquids.
Preparing for overvoltage, the company plans to open a terminal in the county of Orange, Texas, in the second half of this year to export 120,000 BPD of ethane and aims to extend this in 2026.
The energy transfer said that it would add 250,000 BPD export capacity for natural gas liquids in Nederland, Texas, from the third quarter of 2025.
His co-leader, Marshall McCrea, told a call for results in November: “The international demand for ethane and LPG continues to grow through the roof … in particular in China.”
(1 $ = 7,2751 Chinese Yuan Renminbi)
(Report by Siyi Liu, Florence Tan and Gabrielle Ng in Singapore and Arathy Somasekhar in Houston; additional report by Georgina McCartney in Houston; edition of Tony Munroe and Sonali Paul)
