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Key takeaways

  • ExxonMobil will permanently shut down its former steam cracker facility in Singapore in June 2025 due to losses and overcapacity in the global industry.
  • The closure follows the commissioning of a new, larger cracker in China and reflects a broader trend toward consolidation in the Asian petrochemical sector.
  • ExxonMobil is exploring the option of purchasing external feedstocks for some of its downstream units, but analysts question the long-term economic viability if olefin prices are not exceptionally low.

ExxonMobil plans to halt operations at its former steam cracker facility on Jurong Island in Singapore starting in March, Reuters reports. The decision is part of a broader trend in the global petrochemical sector to cut capacity in response to industry losses. Well-informed sources indicate that the shutdown process is likely to be completed in June. The company’s first cracker unit in Singapore, which came onstream in 2002, is being dismantled as chemical producers grapple with overcapacity, particularly in China.

New sources

The closure follows ExxonMobil’s recent start-up of a new steam cracker in Huizhou, China, which can produce around 1.6 million tonnes of ethylene per year. According to one source, ExxonMobil has gradually reduced the volumes of its term contracts with customers in Singapore over the past two years. Local buyers are expected to source ethylene from the two remaining ethylene producers in Singapore.

ExxonMobil is retaining a second cracker on Jurong Island, with a capacity of 1.1 million tonnes per year, which came onstream in 2013. The shutdown reflects a broader consolidation trend in the Asian petrochemical industry, with South Korea seeing similar developments.

Exploring options

In the wake of the closure, ExxonMobil is exploring feedstock options to keep some of its downstream polyolefin units running, provided market margins are favorable. Analysts warn, however, that relying on external feedstocks may not be economically viable over the long term unless olefin prices are exceptionally low. As a result of the shutdown, ExxonMobil is expected to import less naphtha, the main feedstock for the cracker.

Data show that ExxonMobil imported around 1.5 million tonnes of naphtha in the first eleven months of this year, compared with nearly 2.5 million tonnes imported over the whole of 2024. In October, ExxonMobil announced plans to cut its workforce in Singapore by 10–15 percent by 2027. The company also recently reached an agreement to sell its petroleum retail operations in Singapore to the Indonesian firm Chandra Asri.

Despite the streamlining measures, ExxonMobil brought a new 592,000-barrel-per-day refining unit onstream at its Singapore refinery in September. (uv)

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