Ethylene prices have soared over 74% week-on-week following the US strike on Iran, reaching a 52-week high on March 18, 2026. This sharp rise is improving profitability for South Korean petrochemical makers, with the ethylene spread—a key margin indicator—jumping from $35 to $241 per ton, nearing the typical breakeven of $250. Overseas buyers should monitor potential supply tightness and price volatility in ethylene, butadiene, and synthetic resins as Middle East production falters and global oversupply eases.
Price surge and margin recovery
Ethylene prices surged more than 74% week-on-week as of March 18, 2026, hitting a 52-week high. This spike far exceeds the 20% rise seen during the 2022 Russia-Ukraine war. The ethylene spread, which measures the difference between product and feedstock prices, widened dramatically from $35 per ton on March 2 to $218 on March 17 and $241 on March 18, approaching the typical breakeven point of $250 per ton.
Supply disruption in the Middle East
Iran's drone attacks have forced partial shutdowns of petrochemical facilities in Qatar and Saudi Arabia. Kuwait and Qatar have declared force majeure, leading to reduced or halted crude and gas supplies. Regional ethylene cracker operating rates are estimated to have fallen below 30%, significantly tightening supply for key feedstocks and intermediates.
Impact on Chinese and global oversupply
The crisis is expected to also hit Chinese petrochemical producers, who have been a major source of global oversupply in Asia. With Middle East output curtailed and Chinese operations potentially disrupted, the structural oversupply that has pressured margins for years may ease, offering a more balanced market for buyers.
What buyers should watch
Overseas importers and distributors should track ethylene and butadiene spot prices closely, as further volatility is likely. The narrowing of the ethylene spread toward breakeven signals potential price increases for downstream products like synthetic resins. Buyers may also face longer lead times and higher logistics costs due to force majeure declarations in the Middle East.
South Korean producer outlook
Securities firms forecast a sharp turnaround for major South Korean petrochemical firms. Lotte Chemical is expected to reduce its operating loss from 943.1 billion won in 2025 to 184.8 billion won in 2026, with KB Securities projecting a return to operating profit of around 100 billion won. Hanwha Solutions, LG Chem, and Kumho Petrochemical are also expected to post profits this year, reversing previous losses.
Source: Read the original report | Published: March 19, 2026