U.S. petrochemical steam cracker economics are in strange territory with propane yielding a higher margin than ethane for the production of ethylene and other petrochemicals. As shown in the left graph below, that is a very rare phenomenon on an average annual basis, having not occurred for six years.
And it is just as rare on a daily basis. From January 2024 until last week, the margin for propane has been above ethane for only 16 days, with most of that during a propane price aberration in early April of this year. But recently the propane margin has averaged about a penny per pound of ethylene equivalent over ethane, 19 c/lb vs 18 c/lb – right graph below, red dashed oval.
The underlying cause has a lot to do with the price of crude oil and natural gas. Propane is more influenced by crude oil pricing while ethane generally trends with natural gas. Since May, crude is down about 15% while gas is only down 6%. A higher relative gas price translates to a higher ethane price relative to propane. That, combined with a lower price for ethylene over the same period (ethane yields more ethylene than propane and so is penalized more by a lower ethylene price) results in the margin for ethylene dipping below that for propane.
Want to know more about NGL feedstock cracker economics? There’s a lot to know. Check out the RBN School of Energy, September 9 - 10, 2026 Live in Houston.
