The US-China tariff battle is set to disrupt ethane and propane markets, according to Citigroup Inc., threatening to upend a trade that has surged in recent years as plastics manufacturing ramps up.
China depends on the US for all of its ethane imports, while roughly 50% of American exports of the feedstock go to the Asian nation, Citi analysts led by Spiro Dounis wrote in a note to clients. With no real alternative markets of China’s size, US producers may be forced to stop separating ethane from natural gas, according to the bank. That could pressure gas prices lower.
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