Raw Material Supply Shortage! INEOS Phenol Declares Force Majeure on Phenol and Acetone Businesses

INEOS Phenol, the world’s leading producer of phenol and acetone, has declared force majeure on the supply of both products and introduced sales allocation measures to address customers’ limited supply needs. The force majeure was caused by a disruption in raw material supply to the company’s European phenol production operations.

The triggering incident was a fire that broke out on the evening of July 15, 2026, at BP’s refinery in Gelsenkirchen, western Germany. The fire occurred at the Scholven site, while the area was in the grip of a heat wave. This integrated refining and petrochemical complex processes about 12 million tons of crude oil per year and supplies fuels and feedstocks to the chemical industry in Germany and across Europe.

It is precisely this linkage in raw material supply that connected the refinery fire to the phenol shortage. Gelsenkirchen is a key source of benzene and cumene for INEOS. Benzene from the BP refinery supplies feedstock to INEOS’s cumene unit in Marl, and this cumene is then converted into phenol and acetone at INEOS’s plant in Gladbeck. When the fire disrupted these upstream raw material supplies, INEOS could no longer secure sufficient feedstock to maintain the contractually agreed production volumes of phenol and acetone, which led to the declaration of force majeure and the implementation of sales allocation measures.

The Gladbeck plant is at the center of this incident. The plant is the world’s largest single-line phenol production unit and one of the world’s largest phenol production bases, with an annual phenol capacity of approximately 650,000 tons and an annual acetone capacity of approximately 400,000 tons. In June 2026, INEOS confirmed that the Gladbeck plant would continue operating beyond 2027 and remain its main production hub in Europe. Previously, the company had postponed plans to restart its idled Doel plant near Antwerp, Belgium. This decision has given Gladbeck a larger share of regional supply, so any supply disruption at the plant would have a significant impact on European supply.

The timing of the incident is particularly tricky, as the European phenol and acetone markets were already extremely tight before the fire. From 2025 to 2026, producers cut capacity or shut down assets amid high energy costs, carbon-related charges, and competition from low-cost imports, further reducing regional capacity. Earlier in 2026, the market had already absorbed Domo Chemicals’ insolvency at its plant in Leuna, Germany, along with additional capacity cuts, while acetone prices had already risen. Now, INEOS’s force majeure comes on top of a market with virtually no spare buffer capacity.

On the downstream side, the most affected buyers are producers of bisphenol A, phenolic resins, polycarbonate resins, and solvents. These materials are used in automotive components, construction products, electronics and circuit boards, wind turbine blades, and coatings, among other applications. Under the quota allocation plan, these customers will receive reduced supplies and may need to draw down inventories, import from Asia or the United States, or slow their own production under the current circumstances.

As of July 27, 2026, the force majeure clause remains in effect, and the allocation scheme is still in place. The duration will depend on how quickly BP restores normal operations in Gelsenkirchen and how fast feedstock supplies in Marl and Gladbeck return to normal levels. INEOS has not yet announced a specific date for the full resumption of normal supply. Buyers and analysts are closely monitoring whether feedstock supply has stabilized; once it has, INEOS will be able to lift the allocation scheme and resume normal supply.