Costs crush European chemicals! 4 giant plant related to polyether/epoxy/rubber, China alternative opportunity dismantling

1. Overview of the closure plans of the four giants

dow: Close Belgium's Tertre 94000-ton/year polyether polyol plant by the end of the first quarter of 2026 (the capacity will be undertaken by Netherlands Terneuzen 530000 tons/year and Spain Tarragona 60000 tons/year); The European business restructuring will also be promoted in the future. It is planned to close Germany's Buren ethylene cracking plant, Germany's Schroeder chlor and vinyl assets by the end of 2027, and Britain's Bari basic siloxane plant by the middle of 2026.

Ineos: On October 6, it was confirmed to close two factories in Rheinberg, Germany (involving key components of epoxy resin and chlorine production, with an estimated loss of 175 jobs); On October 7, it was announced that Hull Acetyl Factory in the UK would cut 20% of its employees. It has previously been disclosed that a single unit of propylene oxide (PO) and propylene glycol (PG) will be closed in Cologne, Germany, in 2025 (the specific production capacity is not disclosed).

Aronsinko: On October 2 (owned by Aramco, a subsidiary of Saudi Aramco, Netherlands) announced the cessation of the operation of the synthetic rubber production base in the French port of Jerome, with a total annual production capacity of 140000 tons. The products contain neodymium-based cis-polybutadiene rubber (Nd-PBR) and solution-polymerized styrene-butadiene rubber.

Shengxi: It is planned to permanently close Rho methyl methacrylate (MMA) production business in Italy and Porto Marghera acetone cyanohydrin (ACH) business in Italy (ACH is MMA precursor) by the end of 2024; In the future, production will be maintained through third-party procurement of MMA raw materials, while PMMA depolymerization (chemical recovery) pilot projects in Italian factories will be retained.

2. Involving industry and market background

closing device covers polyether polyol, epoxy resin, chlorine, synthetic rubber, MMA/ACH and other key chemicals. Among them:

the European polyether polyol market is weak, with an average annual import volume of 286000 tons from 2020 to 2024 (ESPU statistics of the European Polyurethane Industry Association) and a preliminary import volume of 323000 tons in 2024 (to be finally verified by the ESPU annual report in early 2025), with China, South Korea and Saudi Arabia as the main sources of supply;

epoxy resin (defense, aerospace, new energy), chlorine (clean water, medicine, industrial health) and other products are essential chemicals in the end field, supply contraction will directly affect the stability of the European industrial chain.

1. Cost side: high energy and carbon costs

ineos's official statement explicitly mentions the "high cost of energy and carbon emissions", and Alonsinco also points to "rising costs" as the core dilemma. Due to the continuous influence of geopolitical conflicts, European energy prices have been at a high level for a long time, and policies such as carbon tariff (CBAM) have been implemented. The cost advantage of high-energy-consuming chemical industry has been lost. Take chlor-alkali industry as an example, the proportion of electricity cost in production cost exceeds 40%(ICIS energy cost index). At present, European industrial electricity price is 3-5 times higher than that of major Asian producing countries (Cefic report), which directly leads to squeeze.

2. Market side: supply and demand imbalances and import shocks

weak domestic demand in Europe and the impact of imported products form a double pressure:

demand side: polyether polyol downstream automotive, home appliances, construction and other areas of weak demand, the industry overcapacity problem intensified;

import side: China's polyether polyol industry data in 2024 (Longzhong Information "2024 White Paper on China's Polyether Polyol Industry") shows that the total domestic output is 5.55 million tons, the consumption is 4.08 million tons, the export volume is 1.68 million tons, and the import volume is only 280000 tons. Chinese products with continuously growing exports further seize the European market share and weaken the competitiveness of local enterprises by virtue of their cost and production capacity advantages.

3. Policy side: regulatory overweighting and lack of protection

dow and Aaron Xinke both mentioned "strict European supervision" and "increased regulatory pressure"-the European Chemicals Agency (ECHA)'s REACH regulations and other high compliance requirements, significantly increasing the production, testing and filing costs of enterprises. Ineos pointed out that "lack of tariff protection" has enabled imported products from low-cost regions to impact the local market without barriers and become a key factor in crushing high-cost factories.

1. Regional supply contraction and adjustment of global trade flows

the supply capacity of key chemicals in Europe has declined significantly: polyether polyols have been reduced by 94000 tons/year, synthetic rubber by 140000 tons/year, and the supply of basic chemicals such as epoxy resin and chlorine has also been affected. Dow (capacity transfer), Shengxi (external procurement) and other enterprises by "closing high-cost capacity + restructuring the supply chain" response, in the short term may exacerbate the European regional chemical price volatility, while promoting global trade flows to Asia, the Middle East capacity concentration area tilt.

2. China's chemical industry ushered in alternative opportunities

china's polyether polyol industry has formed a clear competitive advantage: the concentration of industry production capacity will reach 48% in 2024 (accounting for the proportion of production capacity of TOP10 enterprises), and head enterprises such as Wanhua Chemical and Longhua New Materials will accelerate the expansion of production. According to the "14th Five-Year Plan" expansion map of China's polyether industry, the new production capacity of domestic polyether polyol will exceed 4 million tons/year from 2025 to 2029 (planning value, and the actual release progress will be affected by EIA and construction cycle). The withdrawal of European production capacity creates a window period for China's high-end product exports, especially high molecular weight polyether, graft polyether, special polyether (such as Wanhua Chemical Penglai project involved in high rebound polyether, differentiated EOD, water reduction agent polyether) and other high-value-added categories, is expected to fill the European market vacancy.

Short-term: Traders can focus on the supply gap of European epoxy resin, polyether polyols and other products, relying on the domestic 1.68 million tons/year polyether export base (2024 data) to seize market share;

long-term: Manufacturers need to accelerate the landing of high-end production capacity (such as Wanhua Chemical Penglai polyether EOD expansion project), to avoid soft foam, hard foam basic polyether "profit meager" industry pain points, to high value-added products transformation.