US olefins price downturn continues as ethylene, butadiene contracts drop

Contract prices for US olefins continued their downward trend over 2025, as the latest assessments for both butadiene and ethylene CP entered their fourth straight month of drops.

Platts, part of S&P Global Energy, confirmed the May US ethylene contract price at 30.25 cents/lb on June 3, down 1.25 cents/lb from April. Meanwhile, the butadiene contract price for June settled at 40 cents/lb CIF USGC on June 2, 2.75 cents/lb below the previous assessment.

This marks the fourth consecutive month of lower settlements for both olefins, resulting in the contract price for these two commodities reaching its lowest point of the year, at levels not seen in over a year.

These contract settlements also reflect a broader downward trend in US olefins that has persisted throughout most of 2025.

Prices for polymer-grade propylene are currently 6 cents/lb lower than at the beginning of the year, despite holding stable month-over-month for the May contract at 38 cents/lb, according to Platts data.

Ethylene and butadiene follow the same trend as their feedstocks. On May 30, upstream ethane prices dropped to a five-month low of 22 cents/gal, primarily due to trade tensions between the US and China, which led to stricter export regulations. The US now requires licenses for exporting ethane to China and has revoked some, creating uncertainty and exerting downward pressure on prices.

By May 3 ethane prices continued their downward trend, but some market participants showed optimism about possible stabilization amid stable May exports despite new challenges.

On the other hand, naphtha cargo prices also fell during May but have surged since June started, increasing $5.68/mt or 2.68% to June 3 from May 30 on a FOB US Gulf Coast basis, according to Platts data.

Uncertain olefin outlook

Spot ethylene and propylene markets have remained with subdued activity over the last month, with little trading heard and prices remaining stable.

"It's a bad idea to sell at current levels" from a trader's perspective, an ethylene market participant said, as the market is accumulating pent-up demand.

With feedstock prices as low as they are, market participants believe crackers will remain running, despite poor demand creating long market conditions. Downstream, polymers markets have been flooded with uncertainty regarding tariffs, which have caused high inventory levels and slow trading.

Amid these conditions, ethylene and propylene market participants are unsure what to expect for price direction. There is no incentive for prices to rise in the coming months, excluding any impacts to production due to the incoming US Gulf Coast hurricane season. However, production issues as of yet have not had a big impact in spot market dynamics, given market oversupply.

Sources in the butadiene market also think the current conditions could keep the downward trend in place. A buyer in the US said they are watching the US tariff uncertainties with concern, and that prices might need to go even lower to open the arbitrage to other regions.

"Butadiene still can go much lower," said a US source. "Now we have good supply, low demand, and the trend will continue. [...] Unless supply gets tight, and demand strengthens. ... I've seen butadiene trade at 20 cents. I don't think we can get there now, but it can go lower."