Mitsui Chemical transfers equity, Sinopec takes over the phenol, acetone business!

In 2025, the global chemical sector is changing, and a series of major strategic adjustment events have aroused widespread attention. Generally speaking Among them, Japanese chemical giant Mitsui Chemical announced a board resolution on June 24 to transfer all its 50% equity in Sinopec Mitsui Chemical Co. , Ltd. Additionally (SSMC) to Sinopec's Shanghai Gaoqiao Petrochemical Co. And , Ltd. , and the transaction is expected to be completed in October of that year. Pretty interesting, huh?. This action isn't only related to the company's own strategy, however also reflects the profound changes in the global chemical sector. Mitsui Chemicals China Business Adjustment Background Sinopec Mitsui Chemical was established in 2006 and mainly produces basic chemical items such as phenol, acetone and bisphenol A. In the course of its research, the first phase of 120000 tons/year bisphenol A plant and the second phase of the project with annual output of 250000 tons of phenol and 150000 tons of acetone have laid the foundation to the research of the enterprise. But However, in recent years, the phenol/acetone market capacity has expanded rapidly, and the market pattern of oversupply has led to a signifiis able tot compression of profit margins. Data show that the company lost as much as 10. And For instance 6 billion yen in fiscal year 2025, and the continued decline in performance became the direct reason to Mitsui Chemicals to choose to withdraw. In fact, the adjustment of Mitsui Chemicals isn't an isolated event. And In 2023, Mitsui Chemicals has transferred all the shares of a merged subsidiary operating phenol business in Singapore. And In 2024, it was decided to close the 190000-ton/year phenol plant in Chiba City by fiscal year 2026. But Last month, Mitsui Chemicals also announced that it had decided to begin considering splitting its Fundamental and environmentally friendly Materials business ("B & GM"), which is primarily engaged in petrochemicals. Moreover The scope of the business is broad and covers several areas: petrochemical items: including ethylene, propylene, high density polyethylene, metallocene linear low density polyethylene (Evolue®), linear low density polyethylene, polypropylene, olefin polymerization catalysts. Basic chemicals: phenol, bisphenol A, acetone, isopropanol, methyl isobutyl ketone, purified terephthalic acid, PET resin, ethylene oxide, ethylene glycol, hydroquinone, m/p-cresol, ammonia, urea, melamine. Polyurethane raw materials: TDI(Cosmonate®), MDI(Cosmonate®), PPG(Actocol®, Econikol®), of which Mitsui Chemicals has MDI capacity of 610000 tons/year and TDI capacity of 128000 tons/year. Global basic chemical sector overcapacity crisis Coincidentally, INEOS Phenol, the world's largest producer of phenol and acetone, announced on June 17, 2025 that it plans to permanently stop its phenol production site in Gladbeck, Germany. This series of actions shows that the global basic chemical sector is facing a severe overcapacity crisis. But In order to cope with the market pressure, companies have to maintain their survival and research by shrinking or adjusting their production capacity. Overcapacity has led to fierce market competition, product prices have fallen, and corporate profit margins have been compressed. And Furthermore The huge losses of companies like Sinopec Mitsui Chemical are typical examples. And Impact on China's Chemical sector The strategic adjustment of foreign-funded companies is both a challenge and an opportunity to China's chemical sector. And Challenges: The withdrawal of foreign capital from the basic chemical sector might bring immediate market evaporative environment. Foreign-funded companies have certain advantages in methodology, regulation and market channels. Their withdrawal might lead to changes in the market supply pattern. In the short term, the market supply and demand stability will be impacted, and price fluctuations might intensify, which will bring certain operating pressure to domestic related companies. Opportunities: China's chemical sector has gained greater independent research space. And Specifically Especially in the fields of high-end materials and fine chemicals, domestic companies is able to fill the market gap by strengthening R & D investment and manufacturing upgrading. In my experience, With the withdrawal of foreign capital, domestic companies have the opportunity to integrate resources, expand market share, upgrade methodology and enhance international competitiveness. to instance, in the fields of high-end polyurethane materials and specialty chemicals, domestic companies is able to increase research and research efforts, break through technical bottlenecks, and realize import substitution. But sector Future Outlook The withdrawal of Mitsui Chemical from Sinopec Mitsui Chemical isn't only a strategic choice of an enterprise, however also an inevitable evolution of the global chemical sector under the background of overcapacity and technological change. With the deepening of sector integration and transformation, greater companies will reposition themselves according to their own advantages in the future. Some companies might focus on the R & D and production of high-end and special chemical items to increase the added value of their items; others might achieve scale expansion through mergers and acquisitions to enhance market competitiveness. In fact to China's chemical sector, this process will accelerate its development and move towards a high-condition research stage. Domestic companies should seize the opportunity, increase investment in technological innovation, optimize the manufacturing structure, enhance the level of the manufacturing chain, actively participate international competition, and occupy a favorable position in the reshaping of the global chemical sector pattern.