Analysts and traders say China’s naphtha imports this year will hit a record high, driven by new plant startups and caution over U.S. propane and ethane purchases, supporting refinery margins for this petrochemical feedstock.
As the world’s largest petrochemical producer, China’s cracker operators have shifted to cheaper U.S. propane and ethane feedstocks in recent years. However, sources say these companies are shifting some demand back to naphtha after U.S. supplies were disrupted by the Sino-U.S. trade war.
Consultancies Rystad Energy and FGE say diversification needs and new plant startups will push naphtha imports to a record 16-17 million tons (144-153 million barrels) this year. JLC expects imports of around 15 million tons by 2025. Official data shows China imported about 12 million tons in 2024.
“After issues with ethane and propane imports, there’s a trust factor with U.S. cargoes,” said Pankaj Srivastava, senior vice president of commodity markets at Rystad Energy. “Naphtha isn’t affected by these concerns due to its diverse supplier base.” He added that by end-2025, China will have 4 million tons/year of new ethylene capacity, with another 2 million tons/year coming online in H1 2026, boosting import demand.
The IEA’s July report noted China’s naphtha demand is expected to grow about 6% in 2025 and 8.6% in 2026, far outpacing combined propane and ethane growth (just 2.3% in 2025 and 1.3% in 2026).
After U.S. supply disruptions, China issued its second batch of 2025 naphtha import quotas in June, nearly doubling last year’s volume to around 24 million tons. Government data shows January-May naphtha imports rose 22.81% year-on-year to nearly 6 million tons, the highest since 2015, mainly from Russia, UAE and South Korea. Propane imports grew 6% to 12.3 million tons, while ethane imports were flat at 2.3 million tons.
Energy Aspects said in a July 4 report that China’s LPG imports, including propane, may remain low in Q3 due to caution over U.S. cargoes. Analysts say strong naphtha demand will support Asian refinery margins. Buoyed by China’s feedstock demand outlook, naphtha margins rose about 4% this month to $73.30/barrel (premium to Brent).
Source: Reuters
