EIA: China Demand for U.S. Ethane Could Slow Beyond 2026

SECAUCUS, NJ (DTN) – China’s demand for U.S. ethane could slow beyond 2026 after the double-digit growth forecast for exports of the ethylene feedstock for this year and next, the Energy Information Administration said Tuesday (10/14). 

China has historically been the largest destination for U.S. ethane, accounting for 47% of exports in 2024, but this could change after 2026 due to softer demand and a glut in East Asian supply, the EIA stated. 

“Developers in the United States are expanding ethane export capacity to meet increasing global demand for ethane as a petrochemical feedstock, particularly in China,” the EIA said rt. “However, demand growth in China is expected to slow in 2026 amid tightening product margins and oversupply of ethylene derivatives in East Asia.”

The EIA noted that two Chinese ethylene cracker projects have been delayed and may take naphtha as feedstock instead of ethane. This follows a notice issued by the U.S. Department of Commerce’s Bureau of Industry and Security in May that required U.S. ethane exporters to obtain a special license to export ethane to China. The requirement ended on July 2.

The EIA also noted that while naphtha can be sourced around the world, “the United States is the only country capable of exporting waterborne ethane.”

In its Short-Term Energy Outlook for October, the agency forecast that U.S. ethane net exports will grow 14% in 2025, followed by a 16% rise in 2026.

In Tuesday’s report, it said major expansions in U.S. energy export infrastructure are expected to drive that growth.

Those expansions include Energy Transfer’s Nederland and Marcus Hook export terminals and Enterprise’s Neches River terminals, which are expected to collectively add substantial bpd of new capacity through early 2026, it said.

Energy Transfer commissioned its Nederland facility in Texas in the second quarter of this year with capacity to export 250,000 pd of either ethane or propane. It will also expand its Marcus Hook, Pennsylvania, terminal by 20,000 bpd by end-2025.

In July, Enterprise commissioned the Neches River ethane terminal in Texas, which has a capacity of 120,000 bpd.  The second phase of the Neches River terminal is expected to come online in early 2026, adding 180,000 bpd of capacity.

The addition of the Nederland flexport facility and first phase of the Neches River terminal increased U.S. ethane export capacity 16%, the EIA noted, while the second phase of Neches River terminal will expand it a further 21%.