ICIS - chemical podcasts Episode 1331: Asia propylene to seek new balances in the tariff chaos
Apr 23, 2025
Join analyst Seymour Chenxia from the ICIS editorial team as he dives into the turbulent world of the Asian propylene market. He discusses how surging propane import costs due to US-China tariffs could plummet China's PDH run rates below 60%. The conversation reveals shifting supply dynamics, potential plant shutdowns, and how these economic pressures impact downstream demand for propylene derivatives. Chenxia offers insights into market trends and pricing forecasts amid this chaotic landscape, painting a clear picture of the challenges ahead.
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Tariffs Squeeze China's PDH Producers
- US tariff hikes on propane sharply increase costs for China's PDH producers, squeezing margins and forcing potential shutdowns.
- This could halve China's PDH operating rates and lead to tighter propylene supply in the short term.
Replacing US Propane is Challenging
- Fully replacing US propane imports with Middle East sources is impractical due to volume, logistics, and cost constraints.
- Some PDH units relying heavily on US propane will shut down, shrinking China's short-term propylene supply.
PDH Operating Rates Could Plunge
- China PDH operating rates could fall below 60% if maximum tariff impact hits, potentially shutting about half of PDH capacity.
- A less severe scenario expects about one-third of PDH capacity shutdown, still tightening supply substantially.