The Yeosu Petrochemical Industrial Complex in South Jeolla Province / Yonhap The petrochemical sector is coming under renewed strain as naphtha and ethylene margins have slipped back below break-even levels following a brief wartime rebound, reinforcing calls for the government to accelerate its long-delayed industry restructuring.
Margins briefly recovered during the U.S.-Iran conflict as feedstock shortage fears lifted petrochemical prices.
The ethylene-naphtha spread, a key profitability gauge for naphtha cracking centers (NCCs), jumped to about $370 per metric ton in April from $90 in February, but fell back below $200 in June as supply concerns eased and buyers delayed purchases.
The fading war premium comes as the industry's fundamental challenge remains unchanged, with aggressive capacity expansions in China, India and the Middle East continuing to drive a global oversupply.
Ethylene demand is expected to grow by about 6 million tons this year, while new capacity additions, led by China and India, are projected to reach roughly 9 million tons, leaving supply growth outpacing demand.
