June 30, 2025 -
SABIC Shuts Down UK Olefins Plant, Marking End of an Era for European Petrochemicals
In a significant move reflecting the shifting dynamics of the global chemical industry, Saudi Basic Industries Corporation (SABIC) has permanently decommissioned its Olefins 6 cracker in Teesside, UK. The facility, which had been idle since 2020, will not resume operations, effectively ending the UK’s seven-decade-long era of domestic ethylene production.
The 45-year-old plant, originally constructed in 1979, was once a cornerstone of the region’s petrochemical sector. SABIC had initially planned to invest £850 million to convert the facility into a fully gas-fed cracker by 2023. However, prolonged energy crises in Europe forced the company to abandon the upgrade. While the adjacent low-density polyethylene (LDPE) unit will continue operating, its feedstock will now be sourced externally. According to industry sources, the closure impacts approximately 330 direct employees and a similar number of contractors, though no official layoff plans have been disclosed.
This marks SABIC’s second major cracker shutdown in Europe within a year. In April 2024, the company permanently closed its Olefins 3 unit in Geleen, Netherlands. These decisions come amid mounting financial pressures, with SABIC reporting a net loss of RMB 2.29 billion in Q1 2025. Industry analysts speculate that the company may be considering a full exit from the European petrochemical market.
The European chemical sector is grappling with unprecedented challenges. Leading multinationals, including INEOS and Dow Chemical, have recently announced downsizing measures across the region. Soaring energy costs, stringent environmental regulations, and severe overcapacity are widely cited as key drivers behind this wave of closures.
Meanwhile, China’s petrochemical industry is experiencing a boom. The country’s new ethylene plants boast competitive advantages in operational efficiency, raw material accessibility, and cutting-edge technology. Integrated refining and petrochemical complexes are optimizing production from crude oil to high-value chemicals, with chemical yields expected to surpass 70%.
By 2030, China’s ethylene capacity is projected to surge by 80%, reaching 83.87 million tons per year—accounting for nearly 60% of global capacity additions. Approximately 65% of this expansion will rely on oil-based routes, primarily from mega-refining projects. Despite rapid capacity growth, China’s per capita ethylene consumption remains below developed market levels, suggesting a sustained supply-demand balance in the coming years.