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June 18, 2025
Plastics Industry Could Be Affected by Ethane Export Controls
Plastics Industry Could Be Affected by Ethane Export Controls
In a sharp escalation of trade tensions between the U.S. and China, the Trump administration is moving to block critical U.S. ethane exports to China, a decision that could send ripples through the global petrochemical industry. This potential export denial follows China’s decision to restrict exports of rare earth metals to the U.S., raising the stakes in the ongoing trade standoff.
Enterprise Products Partners, the leading U.S. ethane exporter, confirmed it was notified by the Commerce Department of the government’s intent to reject shipments totaling 2.2 million barrels of ethane from Texas to China. The company now has 20 days to respond to the notice.
The U.S. claims that ethane and butane shipments to China pose an “unacceptable risk” of being used for military purposes, requiring exporters to obtain special federal licenses. However, with China being the largest global importer of American ethane—a crucial ingredient in plastics and petrochemicals—the implications are significant. Roughly half of all U.S. ethane exports currently head to China, and finding alternative buyers will not be easy.
Analysts warn that the fallout could be severe. “The decision has the potential to ruin the U.S. ethane market and disrupt global flows,” noted Kristen Holmquist of RBN Energy. Meanwhile, Julian Renton of East Daley Analytics highlighted that the greater blow could land on China’s own plastics industry, potentially halting billions in planned expansions.
With uncertainty looming, exporters like Enterprise and Energy Transfer face difficult decisions, and the global ethane trade braces for disruption. Learn more about this topic here.
Enterprise Products Partners, the leading U.S. ethane exporter, confirmed it was notified by the Commerce Department of the government’s intent to reject shipments totaling 2.2 million barrels of ethane from Texas to China. The company now has 20 days to respond to the notice.
The U.S. claims that ethane and butane shipments to China pose an “unacceptable risk” of being used for military purposes, requiring exporters to obtain special federal licenses. However, with China being the largest global importer of American ethane—a crucial ingredient in plastics and petrochemicals—the implications are significant. Roughly half of all U.S. ethane exports currently head to China, and finding alternative buyers will not be easy.
Analysts warn that the fallout could be severe. “The decision has the potential to ruin the U.S. ethane market and disrupt global flows,” noted Kristen Holmquist of RBN Energy. Meanwhile, Julian Renton of East Daley Analytics highlighted that the greater blow could land on China’s own plastics industry, potentially halting billions in planned expansions.
With uncertainty looming, exporters like Enterprise and Energy Transfer face difficult decisions, and the global ethane trade braces for disruption. Learn more about this topic here.
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