Data from S&P Global Platts shows that the spot price of ethylene in Northeast Asia rose to $1,135 per tonne on September 1, the highest level since May 18. Ongoing volatility in US-Iran relations and disruptions to feedstock shipments through the Strait of Hormuz have further tightened regional spot supplies, pushing current ethylene prices to a premium of nearly 62% over the pre-conflict level of $695–$710 per tonne.

Prior to the conflict, the Asian ethylene market was characterized by a structural oversupply; the average price in February was $702 per tonne, and the ethylene-naphtha spread was only $94 per tonne—far below the $250 per tonne break-even point for integrated production facilities.

This round of price increases is not driven by demand—as regional downstream polyethylene and PVC markets remain sluggish—but rather by a severe shortage of physical spot supplies. Northeast Asian ethylene prices climbed from $1,000 per tonne at the end of July to $1,100 per tonne by August 31. Strengthening Brent crude oil prices drove a further $35 per tonne increase on September 1, bringing the price to $1,135 per tonne. On that day, the ethylene-naphtha spread stood at $286.50 per tonne; while this exceeds the $250 per tonne break-even line for integrated plants, it falls short of the $300–$350 per tonne profitability threshold for non-integrated facilities. Consequently, profit margins remain razor-thin for all but the most efficient integrated plants.

S&P Global anticipates that spot ethylene supplies will remain tight throughout September, with sellers increasingly favoring formula-based pricing over fixed-price transactions. Geopolitics remains the key variable: should shipping through the Strait of Hormuz normalize, the market could see a repeat of the sharp price correction witnessed in June. (Source: Sinochem New Network)

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