How is China's ethylene capacity expansion reshaping global petrochemical trade flows and regional pricing?

How is China's ethylene capacity expansion reshaping global petrochemical trade flows and regional pricing?
China's ethylene capacity reached 62 million tons per year in 2025, surpassing the US to become the world's largest producer at roughly 25% of global capacity. This supply wave has crushed margins for older naphtha-based crackers in Asia, exemplified by ExxonMobil's shutdown of its 900,000-ton Singapore Unit 1 in May 2026 after 24 years of operation—part of 1.73 million tons of capacity cuts announced in six months. Meanwhile, Chinese producers leverage discounted Russian and Iranian crude plus advanced coal-to-olefins technology to achieve the world's lowest cash costs. During the 2026 Hormuz Strait disruptions, China's PP exports surged to record 554,400 tons in April, cementing its role as the global swing supplier and price setter for Asia-Pacific polyolefins.