In 2025, domestic and imported ethane prices in China diverged. Import prices closely tracked U.S. natural gas prices, with annual gains impacted by short-term policy and geopolitical disruptions. Domestic prices fluctuated within a narrow range, driven by supply-demand dynamics, as diversified supply effectively tempered upward momentum, resulting in overall downward pressure on average prices. Looking ahead to 2026, the divergent pricing pattern in the ethane market is expected to persist. Domestic prices will face downward pressure from both supply and demand constraints, while import prices are projected to remain elevated and stable, tracking the trajectory of U.S. natural gas.
Import Prices: Primarily Linked to U.S. Natural Gas, Policy Disruptions Unlikely to Alter Annual Uptrend
China's ethane CIF prices in 2025 exhibited strong correlation with the U.S. natural gas market, with temporary divergences occurring only during specific periods due to international policy adjustments and geopolitical events. According to Zhuochuang Information data, China's average ethane CIF price in 2025 reached 3,857.86 RMB/ton, marking a year-on-year increase of 304.55 RMB/ton or 8.57%. Notably, despite China reducing its import tariff on ethane from 2% to 1% at the beginning of the year, the annual average CIF price did not follow a downward trend. This can be attributed to two main factors: First, China's ethane CIF prices are closely tied to the U.S. natural gas market. Strong global LNG demand throughout the year drove up U.S. natural gas prices, and as a natural gas byproduct, ethane prices followed suit. On the other hand, the ethane market experienced multiple disruptions from international events in the first half of the year. Factors such as tariff adjustments and restrictions on U.S. ethane exports intertwined, amplifying price volatility and further elevating the annual average price level.
From a price trend perspective, January to March saw seasonal factors dominate, with prices initially declining before rebounding. Before the Spring Festival holiday, upstream enterprises primarily focused on reducing inventory through price cuts, putting downward pressure on market prices. After the holiday, as market trading gradually resumed and demand picked up during the peak production season of “Golden March and Silver April,” prices stabilized and rebounded. In early April, escalating tariff tensions between China and the U.S. heightened risk aversion among importers, reducing spot purchases and directly causing a passive decline in U.S. ethane FOB prices. This shift synchronously impacted the domestic market, leading to a month-on-month drop in China's ethane CIF prices. In early June, U.S. export restrictions on ethane to China took effect, forcing domestic procurement vessels to halt loading at U.S. ports. This led to a buildup of ethane inventories in the U.S., causing FOB prices to plummet rapidly. Consequently, China's landed prices followed suit with a synchronized decline. From August to October, as U.S. export restrictions on China were lifted, prices gradually followed natural gas market fluctuations. Entering the traditional peak season of “Golden September and Silver October,” China's chemical demand rebounded, boosting ethylene production rates from ethane. Concurrently, factors like maintenance at U.S. ethane export terminals intensified supply tightness expectations. Combined with import cost support, prices resumed an upward trajectory. From November to December, driven by robust global LNG demand growth, U.S. natural gas prices climbed to annual highs, lifting ethane prices as a byproduct. Subsequently, colder-than-expected weather in North America led to weaker-than-anticipated natural gas demand growth, causing prices to retreat. Domestic liquefied ethane prices followed suit.
Domestic Prices: Supply-Demand Dynamics Drive Volatility; Diversified Supply Curbs Gains, Average Prices Under Downward Pressure
In 2025, price fluctuations in China's liquefied ethane market narrowed significantly. Although upstream suppliers occasionally caused irrational price spikes due to reduced market circulation from increased captive consumption, diversified supply sources mitigated severe volatility. According to statistics from Zhuochuang Information, China's average liquefied ethane price in 2025 was 3,939.13 RMB/ton, down 158.27 RMB/ton year-on-year, representing a 3.86% decline.
The key variable lies in styrene demand. Whether the market trend can persist hinges on the recovery of styrene end-user demand after the holiday: If end-user demand improves, driving increased styrene demand from the ABS, PS, and EPS industries, benzene prices may continue to rise; conversely, benzene prices are likely to decline.
Current cooling weather and insufficient downstream orders continue to weigh on the market. However, pre-holiday restocking driven by essential demand, coupled with persistent expectations of severe weather in Europe and the US, may allow benzene prices to rise slightly in February. It should be noted, though, that unresolved issues of weak terminal consumption and sluggish orders continue to dampen market sentiment. Should post-holiday resumption fall short of expectations, benzene prices will likely retreat from current highs.
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