China doubles 2025 naphtha import quotas
China has issued a second batch of 2025 naphtha import quotas, nearly doubling last year's allocations, as demand rises due to disruptions in U.S. supplies of cheaper alternatives propane and ethane as well as new cracker startups, six trade sources said.
The quotas, issued in mid-June, were extended to 10 chemical companies which will be allowed to import about 12 MM tonnes (t) of the refined oil product, taking this year's total to about 24 MMt, a source with direct knowledge of the matter said on Tuesday.
Naphtha is used as a cracker feedstock for making petrochemicals, and Beijing tightly controls import volumes, typically issuing company-specific allocations once annually without public announcement.
State-owned Sinopec and CNOOC were allocated 2.49 MMt and 2.76 MMt, respectively, of naphtha import quotas, according to three traders who saw an allocation document.
ExxonMobil, which started operations at its 1.6-MMtpy cracker in Huizhou in March, was also allocated naphtha quota, sources said (learn more).
The sources declined to be named as they were not authorized to speak to the media.
ExxonMobil declined to comment, while Sinopec and CNOOC did not immediately respond to Reuters emails seeking comment.
"As LPG and ethane face supply constraints or become less competitive, especially under new tariffs, naphtha cracking is becoming more attractive," a trade source at a large Chinese petrochemical maker said.
The global propane market was disrupted by the U.S.-China trade war, with China briefly hiking duties to 84% on U.S. imports, forcing Chinese buyers to swap U.S. cargoes for alternatives from the Middle East, while U.S. shipments diverted to Europe and elsewhere in Asia.
China eventually reduced the tariff to 10%, which still made propane less attractive than naphtha.
U.S. exporters, meanwhile, faced disruption to their shipments after the Commerce Department told them to seek licenses to export to top buyer Beijing.
In 2024, China imported 12.14 MMt of naphtha and imports in the first 5 months of this year were 5.9 MMt, according to Chinese customs data.
China is Asia's third largest importer of naphtha behind South Korea and Japan.
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