China Sets Record US Ethane Imports Amid Iran War Feedstock Disruption

In April 2026, China imported about 1 million metric tons (582,000 bpd) of ethane from the United States, the highest monthly volume on record. The surge was a direct response to the disruption of naphtha and LPG shipments from the Middle East caused by the ongoing US-Israeli war with Iran, which halted most shipments through the Strait of Hormuz. Chinese petrochemical producers turned to US ethane as an alternative feedstock for ethylene crackers, which are essential for plastics, paints, and pharmaceuticals.

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The war between the United States, Israel, and Iran has effectively cut the flow of traditional feedstocks (naphtha, LPG) from the Middle East. In April, China’s imports of naphtha and LPG fell by nearly 50 % to 1.834 million tons. The disruption forced Chinese crackers to seek more reliable feedstock, and US ethane—a byproduct of natural-gas production—remained available because it is sourced from the United States.

Reuters

Total US ethane imports by China reached 3.462 million tons in 2026, already exceeding half of the entire 2025 volume. The ethylene gross spot cash margin for ethane-based crackers in northeast Asia hit $845 per ton on April 3, the highest level since June 2018, according to Argus. Near-full-capacity operation of Chinese ethane-based crackers was reported in April, with utilization rising month-on-month and year-on-year.

Reuters

Rystad Energy’s senior vice-president for commodity markets, Manish Sejwal, noted that Chinese units are enjoying strong ethylene margins on ethane while many competing crackers are operating at reduced rates or shut down due to tight Middle-East feedstock availability. Argus’s deputy head of chemicals pricing, Toong Shien Lee, indicated that ethylene demand is expected to weaken in May as buyers resist shrinking production margins, contributing to a projected 41 % drop in US ethane imports to about 414,000 tons.

Reuters

• “These units are enjoying very ?strong ethylene margins, particularly on ethane, as competing crackers across China and the wider region are operating at reduced rates or are shut due to tight feedstock availability from the Middle East,” — Manish Sejwal, Senior Vice President, Commodity Markets – Oil, Rystad Energy

Reuters

• “Ethylene demand has weakened in May due to resistance from buyers of ethylene-based products over shrinking production margins, said Toong Shien Lee, deputy head of chemicals pricing at Argus.” — Toong Shien Lee, Deputy Head of Chemicals Pricing, Argus

Reuters

Data from SCI as of May 9 suggest US ethane imports by China will fall to roughly 414,000 tons in May, a 41 % reduction from April, reflecting weakening domestic demand and tighter profit margins. The shift toward US ethane may be temporary if Middle-East feedstock flows resume, but the current price differential and margin environment could sustain higher ethane usage in the near term.

Reuters