Chemicals Update—Global Ethylene Trade: Structural Shifts and Transatlantic Dynamics

Global ethylene trade continues to evolve amid structural changes in supply and demand. Cracker closures in Europe and expanding capacity across Asia—particularly in China—are driving notable shifts in global trade patterns.

In H1 2025, European ethylene output dropped 6% year-on-year to 8.2 million metric tons (mt). Some producers now find it more cost-effective to import US ethylene than to produce it locally. However, with demand along the polymers supply chain remaining muted, European buyers are reportedly preferring taking smaller parcels at the same price rather than committing to large volumes. Despite weak downstream demand, the contraction of European capacity has supported Transatlantic eastbound trade, which saw roughly 600,000 mt of ethylene shipped in the first ten months of 2025. In contrast, China imported just over 20,000 mt of ethylene but took an estimated 1.8 million mt of ethane from the Enterprise terminal alone, as the country continues to ramp up ethane-fed cracker capacity. The same US terminal remains a key export hub for ethylene, though the market is watching Energy Transfer’s new export project, expected to start ethylene shipments in Q4 2025. Notably, in April, only 220,000 mt of ethane were exported from Enterprise to China—the lowest figure of the year—amid growing concerns over demand, which was depressed by the escalating trade war between China and the US.

US Enlarges Ethylene Exports to Southern Europe

In the US, ethylene exports were subdued during the first four months of 2025, with March recording the lowest volume of just 22,000 mt. This was largely due to the usual maintenance season at US crackers, which reduced available stocks and limited suppliers’ ability to secure cargoes. Lower volumes put downward pressure on freight rates, which fell by 8% in Q1 2025. However, as supply and demand increased on the Transatlantic eastbound route, rates adjusted slightly upward in April. From May through August, exports recovered, averaging 88,000 mt per month, despite the typical summer slowdown in European demand. From September onward, volumes declined again, coinciding with the autumn maintenance cycle at US crackers and leading to a 6% decline in the freight rates for shipping 11,500 mt.

A key development this year has been the growing share of US exports bound for Southern Europe. The Mediterranean region and Portugal together received 369,000 mt, compared with 234,000 mt sent to Northwestern Europe, including 200,000 mt to Belgium. Portugal and Italy remain the largest importers in Southern Europe, sustaining demand for handysize gas carriers typically employed in ethylene transport.

As Italian demand grows, backhaul distances have increased: the return voyage from Antwerp to Houston averages 16 days, compared to 19–21 days from Italian ports. However, this figure may be even higher, given that discharge operations at Italian ports were reportedly proceeding slowly. Ethylene trade remains largely one-way, with many vessels returning to the US in ballast after discharging in Europe.

Looking ahead to 2026, market participants are negotiating new contracts, with a clear preference for reduced long-term commitments and more spot trading—a trend that may benefit shipowners active in long-haul routes, given the ongoing price advantage of US ethylene.

Ethane Expected to Replace Ethylene Shipments to NWE

Further structural change is expected from 2027, when INEOS plans to start up its 1.45 million mt ethane-fed cracker in Antwerp. The facility will consume approximately 1.9 million mt of US ethane annually, likely displacing ethylene imports into Belgium and creating additional demand for handysize gas carriers currently operating on Transatlantic routes. The olefins from the new cracker are expected to erode the market share of existing producers. In particular, TotalEnergies’ Belgian cracker is scheduled to shut down by the end of 2027, as the company’s major offtake contract for its ethylene output will expire at that time and will not be renewed, leaving the unit without an outlet for its production. The decision is likely driven by expectations of more competitively priced ethylene from the new facility.

As ethylene imports to Northwestern Europe will decline, traders may redirect greater volumes toward the Mediterranean. Ethylene demand in Sines, however, remains uncertain. The Portuguese complex has been undergoing expansion since 2023, which, once completed, will increase polyethylene and polypropylene capacity by 600,000 mt. Although there is no official confirmation, some sources suggest that the cracker at the site may restart operations in March 2026, with downstream lines coming online in the second half of the year. Once operational, imports into Portugal are expected to decline, reducing demand for shipping. To date in 2025, 17 voyages from Houston to Sines have been completed, totalling approximately 145,000 mt of ethylene.

Ethylene Carriers Fleet Aging

Despite steady ethylene flows expected on the Transatlantic eastbound trade lane next year, handy size freight rates are unlikely to be supported by these volumes. Rates may remain at levels similar to this year or even decline slightly, given the constraints of the fleet. Some owners of vessels with capacities around 12,000 cbm may seek to redeploy their ships to the East of Suez for regional trades, where demand for such vessels is stronger. A few vessels of this size, however, may remain in the West to meet prompt requirements if needed.

Overall, the current fleet of ethylene carriers is aging, with 85 vessels, or 785,000 cbm, older than 15 years, representing approximately 40% of the total fleet. This exposes the sector to a high risk of scrapping and a potential reduction in fleet size, while newbuild capacity is estimated to add slightly over 300,000 cbm (with vessels ranging from 7,000 to 48,500 cbm) by 2028.

US to Remain Leading Supplier of Ethane and Ethylene

Regardless of short-term demand fluctuations in Europe or Asia, the US is set to remain the world’s leading exporter of ethylene and ethane for years to come. The launch of another cracker in Texas, scheduled for 2026 and integrated with downstream polyethylene lines, underlines the country’s continued ambition to strengthen its position in the global olefins market.

The global ethylene market is entering a period of realignment. Europe’s reduced capacity, Asia’s ongoing expansion, and the US drive toward greater export capability are redefining trade routes and logistics patterns amid aging ethylene carrier’s fleet. As Southern Europe’s role strengthens and US suppliers consolidate their position, the coming years are likely to bring continued change in trade flows, vessel deployment, and contract strategies across the global olefins value chain.

By Svitlana Synoha, Market Analyst, Chemicals, SSY.