By Mohi Narayan and Joyce Lee
In a challenging environment for petrochemical producers, companies in Europe and Asia are struggling to stay afloat due to overcapacity in China and high energy costs in Europe. This has led to depressed margins and a wave of consolidation in the industry.
Here’s a breakdown of the consolidation moves by major producers around the world:
Exxon Mobil
ExxonMobil Chemical France announced the shutdown of its steam cracker and chemical production at Gravenchon, citing losses of over 500 million euros since 2018.
Formosa Petrochemical
Formosa Petrochemical has operated only one of its three naphtha crackers for a year, keeping the others offline due to poor demand and margins.
Ineos
UK-based Ineos acquired TotalEnergies’ businesses in southern France, becoming the sole owner of key units.
LyondellBasell
The US-based company is conducting a strategic review of its European assets and recently sold one of its units in Texas to INEOS Oxide.
Mitsui Chemicals
The Japanese firm announced plans to close several plants by fiscal year 2027, citing challenging market conditions.
Pengerang Petrochemical Co (PRefChem)
The joint venture between Petronas and Saudi Aramco has kept its naphtha cracker shut since maintenance earlier this year.
Saudi Basic Industries Corp (SABIC)
SABIC announced the permanent shutdown of a naphtha-fed cracker in the Netherlands due to routine maintenance.
Shell
Shell sold its refinery and petrochemical assets in Singapore to a joint venture, as part of its strategy to focus on profitable businesses and reduce carbon footprint.
Sumitomo Chemical
Saudi Aramco agreed to buy a stake in the petrochemical joint venture Petro Rabigh from Sumitomo Chemical, reshaping the ownership structure.
Analysis:
The petrochemical industry is facing significant challenges, with companies struggling to maintain profitability in a tough market environment. Consolidation moves, such as plant closures and asset sales, are becoming more common as firms seek to streamline operations and improve efficiency. These changes can impact global supply chains, pricing dynamics, and investment opportunities in the sector. It is crucial for investors and industry stakeholders to closely monitor these developments and adapt their strategies accordingly to navigate the evolving landscape of the petrochemical market.
