By Mohi Narayan and Sam Li

NEW DELHI/BEIJING, May 12 (Reuters) - China boosted U.S. ethane imports to all-time highs in April to capitalise on strong petrochemical margins as the supply of other feedstocks from the Middle East was disrupted by the Iran war, according to traders, analysts and shipping data.

The U.S.-Israeli war with Iran halted most naphtha and liquefied petroleum gas (LPG) shipments from the Middle East through the Strait of Hormuz, forcing Chinese petrochemical producers to turn to the United States for more supply.

That was despite trade tensions that last year led Beijing to briefly impose a 125% tariff on U.S. shipments.

China imported around 1 million metric tons (582,000 barrels per day) of ethane in April, the most ever, led by purchases from Satellite Chemical, Wanhua Chemical and SP Chemical, data from Kpler and local consultancy Sublime China Information showed.

There was no immediate response from the companies to Reuters' requests for comment.

China's ethane imports have totalled 3.462 million tons so far in 2026, more than half of the volume for all of 2025, with the U.S. its sole supplier, Kpler data showed.

Meanwhile, China's naphtha and LPG imports nearly halved to 1.834 million tons in April, Kpler data showed. Ethane, naphtha and LPG are building blocks of petrochemicals used to make plastics, paints and pharmaceuticals.

STRONG MARGINS FOR ETHANE CRACKERS

The ethylene gross spot cash margin for ethane-based crackers in northeast Asia was at $845 per ton on April 3, the highest since June 2018, according to pricing agency Argus.

"These units are enjoying very strong ethylene margins, particularly on ethane, as competing crackers across China and the wider region are operating at reduced rates or are shut due to tight feedstock availability from the Middle East," said Manish Sejwal, senior vice president for commodity markets - oil at Rystad Energy.

China's ethane-based crackers operated at near full capacity in April, with utilisation rising both month-on-month and annually, according to Chinese consultancy JLC and Energy Aspects.

Unlike other feedstocks, ethane remains readily available since it is supplied from the U.S., a source at a Shanghai-based cracker operator said. The source declined to be named as he was not authorised to speak to media.

The United States is the world's largest producer and exporter of ethane, which is a byproduct of natural gas production. China accounts for nearly half of total U.S. exports, data from the Energy Information Administration showed.

However, May imports are expected to drop to about 414,000 tons, 41% lower than April, SCI data showed as of May 9, as domestic demand weakens.

Ethylene demand has weakened in May due to resistance from buyers of ethylene-based products over shrinking production margins, said Toong Shien Lee, deputy head of chemicals pricing at Argus.