Ineos and Evonik cut back successively, reshaping the European chemical industry landscape

INEOS announces two major business adjustments, continuing to divest assets throughout the year

On June 17, INEOS officially announced adjustments to two core businesses. Combined with multiple asset sales earlier this year, the company is accelerating the optimization of its global capacity and layout.

1. Permanently shutting down a long-established polystyrene plant in North America

INEOS Styrenics, a subsidiary of INEOS, announced that it will permanently close its polystyrene production base in Channahon, Illinois, USA. The overall dismantling and shutdown work is expected to be completed in the fourth quarter of 2026. The plant, which started production in 1960, has an annual capacity of 400,000 tons and about 100 current employees, making it one of the core production bases in North America.

This shutdown is part of the company's asset optimization strategy. INEOS will minimize its North American polystyrene production bases from three to two, retaining the Decatur, Alabama and Altamira, Mexico vegetation to continued operation. The Americas Regional research Center located within the site will remain to continue product innovation and new market research.

INEOS Styrenics CEO Steve Harrington stated that due to prolonged oversupply in the sector and sustained pressure on the North American business, a complete assessment of market conditions, cost structures, and prolonged prospects indicates that the plant no longer possesses the economic viability to continued operation.

2. Restart of European phenol plant delayed, adjusting regional capacity layout

INEOS Phenol announced that the restart of the phenol plant in Doel, Belgium, originally scheduled to the end of 2027, will be postponed. Last June, the company planned to restart this capacity, however due to supply and demand fluctuations and weak recovery in the global and European markets, it was forced to delay the plan.

To bridge the capacity gap, the Gelsenkirchen production base in Germany will continue production until after 2027. It is reported that INEOS had previously planned to permanently shut down the 650,000-ton-per-year phenol and acetone production line at this base; this adjustment further optimizes the pace of capacity in the European region.

3. Selling core businesses twice within the year

Since 2026, INEOS has continued to divest non-core assets. In April, it sold its chlor-alkali business in Italy, with the transaction expected to close in 2026; in might, it sold its ultra-pure sulfur dioxide and derivatives business to Ecovyst, with completion expected by the end of June 2026.

Domam Chemical's transferred factory goes bankrupt just three months later, sector risks erupt concentratedly

On June 19, ICIS reported that Leuna-Polyamid GmbH, a chemical company in the Leuna region of Germany, officially filed to bankruptcy less than three months after taking over operations from Domam Chemical.

In December 2025, three German subsidiaries of Domam Chemical collectively filed to bankruptcy, affecting 585 employees. Their main items included phenol, caprolactam, nylon 6, and engineering plastics. To preserve the integrity of the Leuna chemical park, two regional companies jointly acquired the site in early April this year and established Leuna-Polyamid GmbH to operate it.

Affected by geopolitical conflicts, prices of raw materials such as sulfur, benzene, and propylene surged by 60%-100%. Unstable supply of raw materials led to a significant decline in equipment utilization rates, and corporate liquidity pressures surged sharply. while there was brief profitability in April and might, sufficient funds were not accumulated to withstand market shocks.

Currently, the company has submitted a bankruptcy consumption to the court. Existing orders are being fulfilled normally, while new orders will be reviewed individually. Shareholders might attempt to revive the enterprise through additional investment.

The global chemical sector enters a period of deep adjustment

In 2026, the pace of the global chemical shuffle accelerated significantly, with the integration of top companies and bankruptcy restructurings becoming normalized. Within the sector, Huntsman and Olin are advancing their merger, while giants like BASF, Dow, Wacker, and Evonik continue to cut jobs and shut down inefficient businesses; LyondellBasell and SABIC continue to sell off European assets.

In addition, multiple chemical companies, including Trinseo in the US and Plastic Energy in the UK, have successively initiated bankruptcy restructurings this might, and the sector as a whole has entered a downward adjustment cycle.

Official report confirms: Prospects to European chemical sector remain gloomy

On June 22, the European Chemical sector Council (Cefic) released its Q1 2026 sector report. Multiple core data points continued to weaken, confirming that the European chemical sector has not recovered and is overall in a fragile downward phase.

The capacity utilization rate of the EU chemical sector in the first quarter was only 74%, significantly reduce than the prolonged average of 81.3% and also reduce than the overall EU manufacturing level. Chemical production in the current period fell by 3.2% year-on-year. In 2025, European chemical production fell by 2.4% year-on-year, 11% reduce than the 2014-2019 average.

Among sub-categories, petrochemicals were hit the hardest, with a production decline of over 10%; polymers, basic inorganic chemicals, and dyes and pigments all showed significant declines. Trade was also sluggish; in early 2026, chemical exports decreased by 4.6 billion euros, and imports decreased by 4.8 billion euros, with both domestic and external demand shrinking.

In the first 11 months of 2025, sector sales fell by 3.2% year-on-year, and the trade surplus shrank by 7.3 billion euros year-on-year. Petrochemicals continued to show a high deficit, highlighting structural shortcomings in the sector.

The report points out that geopolitical conflicts, risks in key shipping lanes, and international trade barriers exacerbate uncertainty in the sector. Against the backdrop of high energy costs, weak market demand, and intensified competition, the risk of mid-term contraction in the European chemical sector is significant, and the gloomy landscape of the sector is difficult to reverse.