ExxonMobil Company has commenced the phased shutdown of its first steam cracker on Singapore’s Jurong Island as the worldwide petrochemicals sector continues to face stress from oversupply and weakening margins.
The 2002 facility, which has operated for greater than 20 years, will start winding down from March, with a full cessation anticipated by June, in response to trade sources acquainted with the event.
The transition follows a chronic interval of margin compression throughout Asia, pushed largely by important capability additions in China.
Petrochemical producers within the area have posted consecutive quarterly losses as product spreads stay beneath breakeven ranges. ExxonMobil didn’t present direct affirmation of the shutdown, stating solely that it doesn’t touch upon market hypothesis.
Nevertheless, operational changes in recent times point out a deliberate scale-back. The corporate has regularly decreased term-contract volumes to clients in Singapore over the previous two years, a growth that aligns with plans to retire the older cracker.
Market members count on the shutdown to shift demand to Singapore’s remaining ethylene producers. The affected plant is one in every of two crackers operated by ExxonMobil on Jurong Island.
Its newer 1.1 million tonnes-per-year cracker, commissioned in 2013, will proceed to run as the corporate consolidates manufacturing round extra environment friendly property. The corporate’s start-up of a 1.6 million tonnes-per-year cracker in Huizhou, China, earlier this 12 months additionally displays an ongoing repositioning of regional capability.
The closure will scale back ExxonMobil’s naphtha import necessities in Singapore. Information from ship-tracking agency Kpler reveals the corporate imported roughly 1.5 million metric tonnes of naphtha within the first eleven months of the 12 months, in contrast with almost 2.5 million tonnes for all of 2024.
Analysts count on the decline to speed up because the plant strikes towards full shutdown. Whereas ExxonMobil is evaluating the choice of buying exterior olefins to help some spinoff operations, analysts be aware that such an strategy will solely be viable if feedstock will be secured at considerably decrease costs.
The event is in line with consolidation noticed in different regional petrochemical hubs, together with South Korea, the place producers have additionally begun rationalising property following prolonged losses.
Trade analysts hyperlink the sector’s present challenges to China’s large-scale commissioning of built-in refinery-petrochemical amenities, which has considerably expanded international output and eroded margins for standalone crackers.
ExxonMobil’s shift in Singapore is a part of a broader portfolio adjustment. The corporate earlier introduced plans to scale back its Singapore workforce by 10–15% by 2027 and just lately agreed to promote its petroleum retail enterprise within the nation to Indonesia’s Chandra Asri.
Regardless of the retirement of the older cracker, ExxonMobil continues to put money into core downstream operations, together with the commissioning of a brand new refining unit at its 592,000 barrels-per-day Singapore refinery in September.
The phase-out of the 2002 Jurong cracker displays the structural changes going down throughout the worldwide petrochemicals worth chain. With persistent oversupply and evolving demand patterns, producers are prioritising high-efficiency, low-cost property and retiring crops that not meet profitability benchmarks.
ExxonMobil’s newest transfer realigns its regional portfolio and reinforces its long-term technique to optimise output whereas sustaining a powerful presence in Asia’s petrochemical market.
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