In H1 2026 the Northeast Asia ethylene–naphtha spread briefly exceeded $250/t in Mar–May but averaged only ~$204/t; naphtha cracking averaged a loss of ~¥706/t, while ethane- and coal-based routes stayed positive (~¥1,300/t). The Hormuz crisis spiked naphtha 65%–82%, pushing Korean cracker runs to 50%–65% and Formosa's 2.93 Mt of Taiwan capacity to force majeure. The margin gap is accelerating an Asian capacity shake-out: ethane-flexible, integrated producers are relatively insulated, while standalone naphtha crackers bear the brunt. We advise traders to factor feedstock structure into credit and hedging — not price alone.