FACTBOX: Asia’s olefins prices rise as Middle East war disrupts steam cracker operations

Asia's naphtha-fed steam crackers have reduced operating rates due to naphtha feedstock supply disruptions from the Middle East, market sources said.

Several steam crackers in Asia issued force majeure due to lower runs.

The Middle East conflict has disrupted shipping through the Strait of Hormuz and market sources said naphtha-fed steam crackers in China would likely reduce their operations, possibly by 20%.

Asia's steam cracker operations had been low prior to the conflict, pressured by negative olefins margins amid high naphtha feedstock prices, according to market sources.

Production

• Singapore's PCS declared force majeure March 5 due to disruptions to maritime transportation and the supply chain by the war, according to a notice to customers seen by Platts, part of S&P Global Energy. The company has a combined ethylene production capacity of 1.09 million metric tons/year in Pulau Ayer Merbau, Singapore.
• South Korea's LG Chem plans to cut operating rates to a minimum of 60% capacity at all its naphtha-fed steam crackers in Yeosu and Daesan, effective "next week," a company source said March 5. The company has three naphtha-fed units with a combined ethylene capacity of 2.95 million mt/y.
• South Korea's Yeochun NCC declared a force majeure as the company is "facing a critical disruption in the procurement of raw materials" due to the blockade of the Strait of Hormuz, the company said in a letter to customers March 4. YNCC had reduced the operating rates to 68% for both No. 1 and No. 2 units at Yeosu, effective immediately, a company source said March 4. It has a combined ethylene production capacity of 2.315 million mt/year.
• South Korea's Lotte Chemical has brought forward the planned maintenance of its Yeosu naphtha-fed steam cracker from the end of April to the end of March, amid issues with ethylene procurement, a company source said March 3. The unit is able to produce 1.23 million metric tons/y of ethylene.
• Lotte's naphtha-fed steam cracker with a 1.15 million mt/y of ethylene capacity in Daesan will continue to run lower at 75% from this week until April, Platts previously reported.
• Indonesia's Chandra Asri declared a force majeure event March 2 on ethylene downstream product supplies to customers, effective immediately, from its naphtha-fed steam cracker, due to feedstock supply disruptions, two company sources and two traders in Asia told Platts March 3. The company's steam cracker has an ethylene production capacity of 900,000 mt/y.
• South Korea's GS Caltex has lowered the operating rate of its naphtha-fed steam cracker in Yeosu by 20% to 63%-65% as of March 4 from 83%-85% in February, with the run rate expected to remain at such levels throughout March, a company source said March 4. The unit is able to produce 900,000 mt/y of ethylene.

Prices

• The Platts-assessed CFR Northeast Asia ethylene price jumped $50/mt day over day to $850/mt March 5, the highest level since April. 3, 2025, at $855/mt.
• Platts assessed CFR Japan naphtha down $2.125/mt day over day at $774.375/mt March 5.
• The spread between ethylene and naphtha was calculated at $75.625/mt March 5, wider $52.125/mt from the day before. However, it is still lower than the breakeven spread of $250/mt for integrated producers and $300-$350/mt for non-integrated producers, Platts data showed.
• Platts assessed the CFR China propylene price $10/mt higher from the day before at $900/mt March 5, the highest since May 4, 2023, when the price was at $905/mt.
• Platts assessed CFR China butadiene $50/mt higher day over day at $1,420/mt March 5. It was the highest since Feb. 20, 2025, at $1,450/mt, Platts data showed.