Chemical Giants Face "Plant Closures" and "Record Profits" as Global Industry Enters Deep Restructuring

Since the beginning of 2026, the global chemical industry has been undergoing an unprecedented structural transformation. On one side, leading companies across Europe, Asia, and the Americas are accelerating plant closures, capacity reduction, and workforce layoffs, with numerous established production facilities permanently exiting the market. On the other side, industry giants including Dow, TotalEnergies, and BASF are posting impressive financial results, with quarterly profit growth exceeding 200%. This coexistence of shutdowns and profitability reflects the global chemical industry's transition from extensive expansion to a new cycle of high-quality structural consolidation.

Europe has become the primary region for chemical capacity adjustment. Multiple international giants have announced plant closure plans spanning core sectors including ethylene cracking, chlor-alkali, and fine chemicals.

Dow Chemical recently announced the closure of two production sites in Böhlen and Schkopau, eastern Germany, by the fourth quarter of 2027. The closures involve ethylene cracking units and supporting chlor-alkali and vinyl-based chemical production lines, directly affecting 550 German employees. The Böhlen ethylene cracker is a critical node in the regional chemical industry chain, and its closure will impact downstream enterprises in Schkopau, Leuna, and surrounding areas. Dow will also close its 145,000 tons/year siloxane plant in Barry, UK.

TotalEnergies plans to permanently close its Antwerp cracker in Belgium by the end of 2027, which has an annual capacity of 550,000 tons of ethylene and 230,000 tons of propylene. Shell will permanently shut down two crackers: the 575,000 tons/year facility in Geleen, Netherlands, and the 865,000 tons/year facility in Teesside, UK. LyondellBasell plans to phase out propylene oxide and styrene monomer production units in the Netherlands and is considering selling four olefins and polyolefins-related assets in Europe.

Additionally, AGC Chemicals Europe has initiated employee consultations for the closure of its Thornton Cleveleys plant in the UK. The facility, which has been loss-making for four consecutive years, would affect 190 employees if closed, with production ceasing by the end of the year.

The Asia-Pacific market is also undergoing deep restructuring. South Korea's Ministry of Trade, Industry and Energy has approved the restructuring plan for the Yeosu Petrochemical Complex. YNCC, Lotte Chemical, Hanwha Solutions, and DL Chemical will complete capacity optimization within three years, with a cumulative closure of two ethylene units totaling 1.39 million tons/year. YNCC will permanently close its idle 470,000 tons/year No. 3 unit and 920,000 tons/year No. 2 unit, retaining only its 900,000 tons/year No. 1 unit.

Japanese chemical companies are jointly integrating domestic ethylene facilities. Asahi Kasei, Mitsui Chemicals, and Mitsubishi Chemical have reached a collaboration agreement, while Idemitsu Kosan and Maruzen Petrochemical have formally closed the Chiba ethylene plant. Toray Industries will completely cease PTA production in 2026, exiting that product segment.

The US market is also seeing widespread capacity reduction. BASF has confirmed it will close multiple production lines at its McIntosh, Alabama facility by spring 2027, affecting nearly 80 employees. INEOS Styrolution is permanently closing its polystyrene plant in Illinois (400,000 tons/year capacity), which began operations in 1960. Stepan has permanently closed its surfactant production facility in New Jersey, consolidating capacity in Texas with a target of $100 million in annual cost savings. Invista closed its nylon fiber plant in Virginia in January 2026.

In stark contrast to the wave of plant closures, chemical giants are reporting strong financial results.

Dow Chemical reported second-quarter net income of $802 million, the highest since the fourth quarter of 2022, representing year-over-year growth exceeding 200%. First-half 2026 sales reached $21.886 billion, up 6.6% year-over-year.

TotalEnergies reported second-quarter adjusted net income of $6.03 billion, up 68% year-over-year, with adjusted EBITDA of $13.18 billion and operating cash flow of $10.86 billion.

BASF reported earnings growth across nearly all business segments in the second quarter. EBITDA before special items reached €2.4 billion, an increase of €854 million compared to the same period last year. The company released preliminary figures on July 15 and raised its full-year 2026 earnings outlook.

Shell expects "significantly higher" natural gas trading profits in Q2, despite lower integrated gas production due to the Pearl GTL facility outage in Qatar.

Behind the coexistence of closures and profitability lies a fundamental shift in the global chemical industry's underlying logic. European companies face multiple pressures including persistently high energy prices, weak end-market demand, competition from low-cost Asian chemical imports, rising EU carbon costs, and tightening chemical regulations. US companies are primarily eliminating aging facilities that are far from raw material sources, lack supporting advantages, and have high operating costs.

As BASF CEO Dr. Markus Kamieth stated: "We have further strengthened our market position and made significant progress in restructuring and portfolio optimization." By closing high-energy-consuming, high-cost, low-efficiency legacy capacity, leading companies are concentrating resources on advantaged businesses and efficient facilities. Combined with product price increases and cost reductions, they have achieved counter-cyclical profit growth.

This restructuring wave is characterized by broad geographic coverage, comprehensive product categories, and large scale, spanning core chemical production regions across Europe, the Americas, and Asia-Pacific, and encompassing mainstream chemical products including ethylene, PTA, polystyrene, surfactants, and nylon fibers.

The South Korean government has approved a second restructuring plan for the petrochemical sector, with the two restructuring phases closing at least 2.5 million tons/year of ethylene capacity. Industry analysts point out that under multiple pressures, the global chemical industry has officially moved beyond the era of extensive expansion. Leading companies are achieving cost reduction and efficiency improvement through closures, layoffs, restructuring, and integration. The industry as a whole has entered a new cycle of high-quality structural consolidation.