Facing narrowing margins and global oversupply, several Asian petrochemical producers are turning to ethane as a primary feedstock to reduce costs and adapt to shifting market dynamics. Industry executives revealed this trend at the Asia Petrochemical Industry Conference (APIC) held in Bangkok last week.
With U.S. ethane exports projected to grow by 7% in 2025, companies across Asia are reconfiguring their cracker operations to take advantage of the lower-cost feedstock, which is a byproduct of shale gas and generally cheaper than naphtha.
South Korea’s YNCC Reassesses Strategy
Yeochun NCC (YNCC), South Korea’s largest cracker operator, is re-evaluating investment plans to improve cost efficiency. CEO You-Jin Lee noted that their crackers have been operating at reduced utilisation rates of 70–80% in 2024 due to weak margins. “One of the ways we can do it is by increasing the use of ethane,” Lee said.
China and Thailand Ramp Up Ethane Usage
In China, SP Chemicals is exploring ways to increase ethane feedstock use at its Jiangsu petrochemical complex—from 75% to as much as 90%. This move aligns with the broader industry shift to enhance flexibility and secure cost advantages. Meanwhile, Thailand’s PTT Global Chemical announced plans to integrate U.S. ethane into its operations, with a supply deal for 400,000 tons annually starting in 2029. The decision reflects growing confidence in ethane’s long-term supply security and economic benefits.
Japan Studies Ethanol Alternatives
In Japan, Mitsui Chemicals is examining the potential use of ethanol in its existing crackers. Although still in the study phase, the initiative signals a wider push across Asia to diversify feedstock sources amid economic pressure.
Global Context: Europe’s Contraction, U.S. Expansion
While Asia shifts towards ethane, European chemical producers are retreating. Major players have announced plant closures due to high energy costs and weak demand. In contrast, INEOS is moving forward with a 1.45 million tons/year ethane cracker in Europe, expected to consume 75,000 barrels per day of ethane when operational in mid-2026, according to the U.S. Energy Information Administration (EIA).
India Eyes Infrastructure for Ethane Imports
India, another key market, is preparing to build infrastructure to accommodate ethane imports. An industry source reported that ONGC is actively seeking partners to develop large ethane carriers. The goal is to import 8,00,000 metric tons per year of ethane starting in May 2028 for a western India petrochemical plant.
Outlook: Ethane Adoption Accelerates Across Asia
As U.S. ethane supply expands and economic pressures intensify, Asian petrochemical producers are moving quickly to incorporate ethane as a core feedstock. As reported by reuters.com, the shift not only enhances feedstock flexibility but also positions operators to better navigate a competitive and evolving global market.
