Profit Margins of US Ethylene Companies May Further Contract

Recently, a global energy and chemical industry market information service provider reported that U.S. chemical companies are facing shrinking profits due to price fluctuations in oil and natural gas, along with the impact of tariffs and economic uncertainties. It is estimated that the average price of Brent crude oil will drop by 6.7% in 2025 and by another 7.4% in 2026; the average price of WTI will fall by 6.7% in 2025 and by an additional 7.9% in 2026. The cost of chemical raw materials in the U.S., particularly ethane, fluctuates with changes in natural gas prices. It is estimated that the average price of U.S. natural gas will rise by 66.8% in 2025 and by another 3.9% in 2026. These trends will inevitably squeeze the profit margins of U.S. ethylene producers. However, demand for ethylene is declining. Tariffs have increased the import costs of raw materials used in the production of catalysts and plastic additives, and the EU and Canada may impose retaliatory tariffs on polyethylene exported from the U.S. John Hanson, CEO of U.S. chemical producer Huntsman Corporation, expects that due to uncertainties in tariffs and mortgage interest rates, the recovery of the U.S. real estate market may be delayed, and continued weakness in the construction sector's demand for ethylene will further exacerbate the instability in the ethylene market.