China’s ethane demand back on track, but upside to US prices capped

Despite no official announcement from the government, following reports that China has exempted US ethane from tariffs, we have revised our demand forecast largely inline with our pre-tariff estimates. It remains unclear if China will also grant US polyethylene or LPG exemptions but with China looking to become self-sufficient in base chemical and plastics production and alternative non-US propane available (for a premium), both products are less likely to receive exemptions the immediate future.