Ethylene

Ethylene Market Dynamics Report – Recent Commodity Market Intelligence

I. Price Trends
- **Overseas Market**: In June 2026, ethylene prices in overseas markets experienced volatile declines. The average price at the beginning of the month stood at USD 1,302.25 per ton, with a noticeable decline by month-end.
- **Domestic Market**:
- In Shandong Province, the market price for domestically produced ethylene (purity ≥99%) was RMB 8,500 per ton; the price for ethylene (Shandong origin, purity ≥99%) was RMB 1,280 per cylinder.
- Ethylene quotations were RMB 3,724 per ton on November 24, 2025; RMB 1,767 per ton on August 29, 2025; RMB 2,804 per ton on April 23, 2025; and RMB 2,301 per ton on March 17, 2025—indicating substantial intra-year price volatility.

II. Supply-Demand Situation
- **Supply Side**:
- Global ethylene production capacity continues to expand, with China’s ethylene capacity growing particularly rapidly. As of end-2025, China’s ethylene production capacity exceeded 60 million tons per year, making it the world’s largest ethylene producer.
- Between 2026 and 2027, China plans to commission 20 new ethylene units, adding approximately 18 million tons/year of new capacity. This concentrated capacity ramp-up will further increase market supply.
- Recently, Yulong Petrochemical’s 1.5-million-ton-per-year steam cracker unit is scheduled for start-up and feed introduction, and Shandong Luxi Chemical’s 120,000-ton-per-year MTO unit is set to resume operations—both expected to boost domestic ethylene supply.
- **Demand Side**:
- Ethylene has broad downstream applications. Traditional derivatives include polyethylene (PE), ethylene glycol (EG), styrene, and ethylene oxide (EO). Among these, polyethylene is the largest derivative, accounting for 56.3% of total ethylene consumption in 2025.
- Although demand growth in traditional sectors—including real estate and packaging—has slowed, emerging industries such as new energy, aerospace, and intelligent robotics are driving robust growth in demand for high-end polyolefins and specialty engineering plastics.
- Asia remains the world’s largest ethylene consumption region. China’s polymer demand growth has decelerated to ~3% year-on-year, while India sustains relatively rapid growth at ~9%. Mature markets in Europe and North America have entered a plateau phase; however, demand for electronic chemicals and bio-based materials in these regions is growing at ~10% annually.

III. Import-Export Situation
- China’s ethylene imports continue rising while exports further decline. In 2025, China’s ethylene imports reached 2.824 million tons, up 26.5% year-on-year; exports dropped to 20,000 tons, down 75.3% year-on-year.
- General trade dominates China’s ethylene import structure. Major sources include South Korea, Japan, and Oman—accounting for approximately 93.4% of total imports.

IV. Related Product Market Dynamics
- On June 24, 2025, domestic futures markets saw mostly declining prices across the chemical sector: methanol main contract plunged over 5%; para-xylene (PX) main contract fell 4.15%; and styrene main contract declined 4.45%. Some chemical products exhibited contango-like phenomena (i.e., spot prices exceeding futures prices), potentially exerting a spillover effect on the ethylene market.

V. Analysis and Assessment
- **Price Trend Outlook**:
- In the short term, ethylene prices may remain under downward pressure due to newly commissioned capacities and slowing downstream demand growth.
- In the long term, increasing demand from emerging industries for high-end chemical new materials—and ongoing optimization and upgrading of ethylene production capacity—may support a gradual stabilization and recovery of ethylene prices.
- **Supply-Demand Outlook**:
- On the supply side, rapid expansion of China’s ethylene capacity will intensify market competition, yet simultaneously enhance raw material security for downstream industries.
- On the demand side, coexistence of slowing growth in traditional sectors and accelerating growth in emerging sectors will drive a diversified evolution of ethylene consumption structure.
- **Import-Export Outlook**:
- China’s ethylene imports are likely to maintain an upward trend to meet the demand for high-end chemical new materials production.
- Exports may remain at low levels, constrained by international market competition and trade policy factors.

VI. Forecasts
- **Price Forecast**:
- Ethylene prices are projected to fluctuate near current levels during H2 2026; a modest rebound is anticipated in Q4 2026, supported by seasonal plant maintenance and recovering downstream demand.
- In 2027, as newly added capacities become progressively absorbed and overall supply-demand equilibrium improves, ethylene prices are expected to achieve steady growth.
- **Supply-Demand Forecast**:
- On the supply side, China’s ethylene capacity will continue expanding rapidly, although capacity utilization rates may decline somewhat amid intensifying competition.
- On the demand side, surging demand from emerging industries for high-end chemical new materials will serve as the primary engine driving ethylene consumption growth.
- **Market Trend Forecast**:
- The ethylene market will evolve toward low-carbonization, high-end differentiation, and industrial concentration. Applications of low-carbon technologies, production of high-end polyolefins, and cluster-based industrial development will become dominant industry trends.
- International ethylene trade patterns may shift due to increased ethylene exports from North America and evolving supply-demand dynamics in Asia and Europe.