Sources say Exxon will permanently close one steam cracker plant in Singapore by March.

Four sources familiar with the situation said that ExxonMobil will cease operations in March at the older steam cracker on Singapore's Jurong Island. This is part of the global trend of the petrochemicals industry to reduce capacity due to losses.

Two sources stated that the shutdown of the plant which was opened in 2002 is expected to be completed by June. Two sources declined to identify themselves because they weren't authorised to talk to the media.

Chemical producers are struggling with the losses caused by overcapacity, mainly due to China. China is the largest consumer of petrochemicals that are used in products such as plastics, clothes, shoes and automobiles.

ExxonMobil's spokesperson responded to questions by saying, "We don't comment on market speculation or rumors as a rule." ExxonMobil announced the planned shutdown after a steam cracker was started earlier this year in Huizhou (southern China), which is capable of producing around 1.6 millions tpy of Ethylene.

Exxon has, according to a second source of four, gradually reduced the volume of term contracts with its customers in Singapore over the last two years.

Local buyers are likely to switch from buying from the remaining two ethylene producers in Singapore.

Exxon operates a second cracker of 1.1 million tons per year at Jurong Island, which began operations in 2013. South Korea, a major hub for petrochemicals in Asia, has also seen a consolidation of the sector.

Post-Closure Plans

First source: Exxon may consider buying feedstock for some of its derivative units to continue operation after the cracker is shut down, depending on the margins.

Catherine Tan, ICIS Senior Manager for Chemical Analytics, said that unless they could secure very low prices of olefins, it was unlikely to be an economically viable project on the long-term.

Tan expects Exxon will reduce its imports of naphtha as a result. This is the main feedstock for crackers.

Kpler, a ship tracking firm, reported that Exxon imported approximately 1.5 million metric tonnes (13.4 million barrels), compared to nearly 2.5 million tons in 2024. Exxon announced in October that it would cut 10-15% from its Singapore workforce between 2027. The U.S. major also agreed to sell its petroleum retail business in the city-state to Indonesia's Chandra Asri, co-owner of Aster Chemicals which runs the Bukom refinery-petrochemical complex. Exxon began operations in September at a new refinery unit at its Singapore refinery, which produces 592,000 barrels per day (bpd).

(source: Reuters)