NEW DELHI/SINGAPORE, June 24 (Reuters) - 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 million

metric tons of the refined oil product, taking this year's total

to about 24 million tons, 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 and 2.76

million tons, respectively, of naphtha import quotas, according

to three traders who saw an allocation document.

ExxonMobil ( XOM ), which started operations at its 1.6

million ton per year cracker in Huizhou in March, was also

allocated naphtha quota, sources said.

The sources declined to be named as they were not authorized

to speak to the media.

ExxonMobil ( XOM ) 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 million tons of naphtha and

imports in the first 5 months of this year were 5.9 million

tons, according to Chinese customs data.

China is Asia's third largest importer of naphtha behind

South Korea and Japan.