Sabic will permanently close its 865,000 metric tons per year Olefins 6 steam cracker at Wilton, UK, the company said in a statement June 25, as per Chemweek.The unit has an annual nameplate production capacity of 865,000 metric tons of ethylene, 415,000 metric tons of propylene and 100,000 metric tons of butadiene, according to data from Platts, part of S&P Global Commodity Insights.The cracker has been offline since it commenced a turnaround in October 2020. The facility formerly used naphtha as feedstock and cracked it into olefins for downstream production of polymers. Since the turnaround, the plant has been mothballed and had been undergoing a major upgrade that would have enabled it to use ethane as a cheaper feedstock to produce ethylene.The Wilton ethylene plant is the sixth European cracker to be closed or announced for closure since April last year and is the second cracker in Europe to be permanently shut down by Sabic.In April 2024, ExxonMobil and Sabic separately announced decisions to close crackers in France and the Netherlands. This was followed in October by Eni’s Versalis announcing the planned closure in 2025 of its last two remaining crackers in Italy at Priolo and Brindisi and TotalEnergies announcing in April it would close the smaller of its two crackers at Antwerp, Belgium, by the end of 2027.The Wilton closure takes the total ethylene capacity cut in Europe from these cracker shutdowns to approximately 4.3 million metric tons per year.All the companies implementing the closures have cited reasons including Europe’s lack of competitiveness against lower-cost regions elsewhere and high regional energy and feedstock costs amid a lackluster demand outlook.Sabic said the company “emphasizes that this decision is the result of a thorough analysis aimed at optimizing competitiveness and aligning with long term strategic priorities.”The company’s low-density polyethylene (LDPE) operations at Teesside and associated logistics will continue to operate normally, it said.“The torrent of bad news for Europe’s chemical industry — and all that work in it — sadly continues. With limited ethylene outlets and constrained export capacity, the UK was never going to be able to support three crackers,” said Andy Orszynski, director/ethylene and derivatives at Commodity Insights.“The recent revelation that work to convert and upgrade the Wilton Olefins 6 asset was halted midway — and that Sabic is reviewing their entire European portfolio — meant this decision was virtually inevitable. It’s at least positive news for some Teesside workers — and the two remaining UK crackers — that the LDPE plant will continue to run, but this is still another blow to an industry desperate for positive news,” he said.Market participants had over the past few months been contemplating which company would be next to announce a cracker closure amid the ongoing rationalization in Europe. This announcement comes after LyondellBasell’s announcement June 5 that it is selling units at Berre, France, and Munchmunster, Germany.Following Sabic’s confirmation in a November 2024 earnings call in which it indicated a potential full or partial exit from the European market, many participants had kept a close eye on the Wilton steam cracker.The closure is expected to have a limited impact on European markets, with the brunt of the closure being felt only in the UK due to the site not directly supplying European participants via pipeline, according to market sources.European market fundamentals have been weak, with an ample supply of ethylene despite reduced steam cracker run rates and persistent weak demand from derivative sectors. The focus has been on the ongoing geopolitical tensions and potential impacts on the market ahead of the upcoming industry contract price settlement for July.Consultation with Sabic’s employees is set to begin July 1, according to UK trade union Unite.
mrchub.com