Global ethylene industry: How Much Capacity Has Been Shut Down in The Last Two Years and What Is The Long-Term Impact?

In the past two years, how much capacity has been shut down in the global ethylene industry, and what is the impact on the industry?

According to the latest statistical data,2024So far this year, globally there have been over900Millions of tons of ethylene production capacity, either already shut down or planned to be shut down, account for 4% of the current global capacity.

According to the ethylene asset benchmark model analysis by Wood Mackenzie, the global ethylene capacity at risk of shutdown is 55 million tons, accounting for 24% of the current global capacity.

These high, medium, and low-risk capacities cover 330 ethylene production facilities worldwide, of which 114 are assessed to be at high risk of shutdown.

The global ethylene industry is undergoing significant changes that are impacting the industry's structure.

This article will provide a detailed introduction to the ethylene production capacities that have been or are planned to be shut down.

If the information is incorrect or inaccurate, friends are welcome to criticize and correct it.

I. How much ethylene production capacity has been shut down in the past two years?

ExxonMobil (ExxonMobil）

Guerlain Paris42.5 /Steam cracking unit of the year2024 4The month is permanently closed.

This device from2018The year started, and has been continuously losing money.5The primary reasons for the shutdown, amounting to hundreds of millions of euros, are high operating costs and outdated technology.

IneosIneos）

2024 6The month declares,2026 6The closure of Sarnia, Ontario, Canada last month43 / Styrene production base.

2025 7In [month], it was announced plans to close the facility located in Laval, France.50 /Annual olefin plant.

2026Planning to shut down its Grangemouth, UK by the end of the year.35 /Ethylene plant.

Saudi Basic Industries Corporation (SABIC）

2024 4 Permanent closure of the Heerlen factory in the Netherlands53 / 3Olefin unit.

There is still a set in the Heron factory.70 /Ethylene year4The device will continue to operate normally.

2025 6In [Month], the permanent closure of the olefins plant in Wilton, Teesside, UK was announced.6The device, with a capacity of86.5 /

This device in1979Built and put into operation in the year.2020 10After the monthly maintenance, it has been in a shutdown state.

ShellShell）

2025 7In [Month], it was officially announced that the olefin derivatives plant in Moerdijk, Netherlands, will be shut down.

2025 7In [month], it was officially announced that the aromatics and olefins units at the Rhineland site in Germany will be shut down.

2025 7The official announcement will be made in the month.2026-2027The phased closure throughout the year, located in Moreland, UK83 /Annual cracking unit.

Eni Group (Eni）

subsidiaryVersalisRestructured the Italian chemical department and announced the phasing out of the total production capacity of Brindisi and Priolo.98 /Cracking unit of the year.

The polyethylene plant in Sicily has also been phased out, and the main reason for its closure is still the European basic chemical industry.“Structural and irreversible decline.”。

Dow ChemicalDow）

2025 7In the month, it was announced that there is a plan.2027The ethylene cracker in Böhlen, Germany, will be shut down in the fourth quarter of the year, involving a capacity of51 /

TotalEnergies (TotalEnergies）

Plan to2027Permanently close its location in Antwerp, Belgium by the end of the year.NC2The capacity of the cracking unit is55 /

Mitsui Chemicals

2024 6The closure of Osaka, Japan in the month45.5The 10,000-ton ethylene plant was originally scheduled to be put back into operation after maintenance, but due to technical issues, it was repeatedly delayed and eventually shut down.

Idemitsu Kosan

2024 7Closed in Japan in the month.TokuyamaThe ethylene plant (62.3 /The device has been shut down for a long period due to a gas leak accident.

Located in Chiba37 /The ethylene plant is planned to merge with Mitsui Chemicals' business due to outdated technology.2027Year completed and closed.

Maruzen Petrochemical Co., Ltd.

2026The ethylene plant located in Chiba will be shut down this year, with a production capacity of52.5 /

New Japan Petroleum Company (ENEOS）

Plan to2027Shut down its ethylene plant in Kawasaki for the fiscal year, with a capacity of44.8 /

YNCC

2025 8In the month of announcement, its location in Lichuan50 /The ethylene plant will shut down indefinitely this year.

LG

Currently withGSCaltex in negotiations to merge LishuiYeosuSome production facilities may be shut down.

Rakuten Chemical

Positive and negativeHDThe Hyundai Group is exploring integration plans for the facilities located in the mountains, and may also consider capacity adjustments in the future.

2024 12The factory in Malaysia was closed in the middle of the month.1Cracking unit, related to29 /Ethylene and16 /The annual propylene production capacity was increased, while it was reduced.HDPEReducing the load on the device can minimize economic losses.

Vietnamese Year of the DragonLongSon）10 /The equipment has been shut down for the year.

PhilippinesJGSummitCompany,70 /The cracking unit of the year has been shut down.

China's Shenyang Chemical.2024 2Permanently shut down the catalytic pyrolysis ethylene production unit of Shenyang Paraffin Chemical and its supporting polyethylene unit.

2. In-depth Analysis of the Global Shutdown Trend

1. Cost pressure, global imbalance of raw materials and energy.

The high production cost is the most direct and core reason driving the current wave of shutdowns.

After all, the essence of a costly installation is to make money. When it fails to generate profit or even incurs losses over a long period, it is necessary to consider whether its mission should come to an end.

From the perspective of a business alone, the issue of national industrial supply security would not be considered.

The energy crisis in Europe affects its chemical industry.“Fatal injury”。

The Russia-Ukraine war has deprived Europe of affordable Russian natural gas, directly leading to its natural gas prices being a multiple of those in the United States.3-4

High energy costs have directly destroyed the competitiveness of all energy-intensive industries. The disadvantages of other factors such as carbon taxes and raw materials have been elaborated in detail in the article a few days ago, so they will not be repeated here.

The generational differences brought about by the shale gas revolution in the United States.

Shale gas has provided the Americans with the world's lowest-cost ethane feedstock. The cost advantage of ethane-based cracking units is structural and long-term, which indirectly forces the exit of high-cost production capacity in Europe.

Struggling in the Crevice: Japanese and Korean Chemical Industries.

Japan and South Korea's cracking units, like those in Europe, need to import naphtha and face the same cost pressures as Europe, albeit to a slightly lesser extent.

Japan and South Korea are still facing low-cost supplies from the Middle East and competitive pressure from China's new large-scale facilities, causing older facilities to lose their original economic viability.

The market is under dual pressure from weak demand and overcapacity.

The slowdown in global economic growth is suppressing demand in end markets, leading to a deceleration in the demand growth for ethylene and its derivatives.

The global addition of new capacity has led to a rapid expansion of global ethylene production capacity, resulting in an oversupply in the market.

“ Scissors difference”On one side is slowing demand, on the other side is overcapacity.“The scissor effect”The industry's operating rate declines, product prices are under pressure, profit margins are compressed, and the first to be eliminated are the high-cost capacities at the far right end of the cost curve.

According to the latest data, the existing high-cost capacity on the right side of the cost curve accounts for nearly 16% of the global total capacity.

3. Proactive Choices in Strategic Transformation

Reducing Carbon Emissions andESGShutting down inefficient and high-carbon old facilities, whether actively or passively, is the most direct and effective way to quickly reduce the carbon footprint.

The great shift in investment capital involves companies redirecting their capital expenditures from maintaining old assets to regions with greater growth potential and cost advantages or to more forward-looking fields.

Restructuring the industrial chain and focusing on business by shutting down capacities or merging businesses to optimize the industrial chain, exiting the less competitive bulk chemicals sector, and shifting towards high value-added specialty chemicals.

3. This is an inevitable structural elimination.

The wave of global ethylene shutdowns essentially represents the restructuring of the global chemical industry chain.

This industrial chain restructuring is driven by energy price shocks, capacity cycles, and energy transition.

This restructuring will also reshuffle the global industry's competitive landscape.

The regions that are exiting are those with high costs, strict regulations, and the earliest capacity construction, such as Europe and some developed countries in Asia, which are actively or passively withdrawing from the production of certain bulk basic chemicals.

The advantageous regions include North America and the Middle East, which have low-cost raw materials, and China, which has a huge market demand and integration advantages. Their global supply positions are becoming increasingly solid, and their supply scope is expanding.

For professionals like us, this trend implies shifts in employment opportunities, directions for technological innovation, and the focus of supply chains.

Pay close attention to the strategic trends in asset portfolios of major corporations and the direction of global capacity changes, as they are crucial for our personal career development and corporate strategic direction.