China’s desperation for raw materials to make plastics has driven US ethane exports to record levels, even as the two countries are locked in disputes over everything from Iran to semiconductors.
The Iran war has disrupted oil supplies around the world, leading to a shortage of the petrochemical feedstock naphtha, made from crude and produced in the Middle East. The shortage has pushed refineries in China, the largest plastics manufacturer in the world, to import more ethane, a cheaper alternative and an abundant byproduct of US natural gas production, to help make everything from water bottles to car parts.
The pivot comes as US President Donald Trump visits China with top executives for a two-day summit on Thursday and Friday. The White House restricted ethane exports to the Asian nation during heightened trade tensions last year, but later rescinded them.