China's US ethane imports hit record as Iran war cut rival feedstock supply

• April ethane imports hit 1 million metric tons (582,000 bpd), with total 2026 imports already exceeding half of 2025's full-year volume
• Ethylene margins for ethane crackers reached $845/ton on April 3, the highest since June 2018, while competing naphtha and LPG imports nearly halved to 1.834 million tons
• May imports expected to drop 41% to 414,000 tons as domestic demand weakens due to buyer resistance over shrinking production margins

Summary

Key Development

China's U.S. ethane imports surged to a record 1 million metric tons (582,000 barrels per day) in April 2026, driven by Middle East supply disruptions caused by the U.S.-Israeli war with Iran. The conflict halted most naphtha and liquefied petroleum gas (LPG) shipments through the Strait of Hormuz, forcing Chinese petrochemical producers to seek alternative feedstocks.

Critical Figures

• Year-to-date imports: China has imported 3.462 million tons of ethane in 2026, already exceeding half of 2025's total volume
• Competing feedstocks: China's naphtha and LPG imports nearly halved to 1.834 million tons in April
• Margins: Ethylene gross spot cash margin for ethane-based crackers reached $845 per ton on April 3—the highest since June 2018
• May outlook: Imports expected to drop 41% to 414,000 tons due to weakening domestic demand

Companies Involved

Major Chinese importers include Satellite Chemical, Wanhua Chemical, and SP Chemical. The U.S. is China's sole ethane supplier and the world's largest producer, with China accounting for nearly half of total U.S. ethane exports.

Market Implications

Chinese ethane-based crackers operated near full capacity in April, capitalizing on strong margins while competing facilities reduced operations due to feedstock shortages. However, the outlook has weakened for May as buyers resist higher prices amid shrinking production margins. The development highlights China's continued reliance on U.S. energy supplies despite ongoing trade tensions and previous tariff implementations.