The global chemical industry landscape is being reshaped—supply chain transformation amid the 'East Rising, West Falling' trend

According to Deloitte’s statistics, over 120 chemical plants worldwide have announced shutdowns or temporary suspensions since 2022, with Europe bearing the brunt. Japan and South Korea face constraints due to insufficient domestic feedstock supply, while escalating raw material shortages—exacerbated by Middle Eastern conflicts—further strain their positions. Against this backdrop, China, leveraging its threefold advantages—complete industrial chain integration, breakthroughs in indigenous technologies, and a vast domestic demand market—is emerging as the core hub for global chemical production capacity. Consequently, the market structure of the global chemical supply chain is undergoing profound transformation... 01 West Falling Cliff-edge shutdowns of chemical production capacity in Europe Europe’s chemical industry is experiencing large-scale contraction due to high energy prices, carbon tariffs, and stringent environmental regulations. Data shows that between 2022 and 2025, Europe’s chemical sector cumulatively shut down 37 million tons of permanent capacity—9% of its total capacity. By 2025, Europe’s share of global chemical output had already fallen to 13%. The wave of shutdowns continues into 2026, with legacy capacity exiting steadily. ・ Dow Chemical officially approved the closure of three upstream chemical production bases—in Böhlen and Schkopau (Germany) and Barry (UK)—in July 2026. ・ BASF announced in August 2026 the permanent shutdown of two additional ammonia synthesis units at its Ludwigshafen site. ・ TotalEnergies plans to shut down its 550,000-ton-per-year ethylene cracker in Antwerp, Belgium, by the end of 2027. ・ SABIC has confirmed the permanent retirement of two large-scale cracking units located in the Netherlands and the UK. Share of chemical plant shutdowns by European country While numerous facilities are closing, Europe is not entirely devoid of new projects. New initiatives include INEOS’s ethylene/propylene project, Catalyxx’s bio-based chemicals, and BASF’s catalysts for 3D printing—concentrated primarily on securing feedstock supply and developing future-oriented, high-value-added, green technologies. Yet these isolated projects fall far short of offsetting the pace of closures. According to Cefic’s report, the primary cause of the ‘West Falling’ trend is insufficient energy cost competitiveness—accounting for half the total—followed by demand-related factors (19%), overcapacity (9%), and regulatory burdens (8%). These structural challenges are unlikely to reverse in the long term. As such, Cefic’s Director General offered a blunt assessment: “The rate at which companies are shutting down far exceeds the pace of new investment projects coming online—the European chemical industry is shrinking.” Note: 'West Falling' specifically refers to aging naphtha-based facilities in Europe (and partially in Japan and South Korea). Petrochemical industries in the U.S. and the Middle East remain robust—and retain pricing power. 02 East Rising China emerges as the global chemical hub China’s chemical logistics market reached USD 130.72 billion in 2025 and is projected to reach USD 167.56 billion by 2031, growing at a CAGR of 4.19%. Transportation accounts for 64.77% of chemical logistics revenue. ・ Output dominates half the world’s supply China currently produces approximately 42% of the world’s major chemical products, having built the largest, most comprehensive, and most feedstock-rich chemical production system globally. ・ Capital expenditure leads globally Global chemical industry investment totaled EUR 284 billion in 2024, of which China contributed 47%. China’s chemical industry capital expenditure amounted to EUR 127 billion—46.6% of the global total—while the EU accounted for only 10.4% and the U.S. just 9.0%.

Covestro opens a polycarbonate copolymer plant in Europe

Hello everyone, I’m Xiao Ku @ PlasticLibrary.com—a seasoned, restless veteran of the chemical industry, dedicated for years to helping structural engineers find optimal engineering plastic solutions. ・ World’s first: Covestro has developed a solvent-free melt process applicable to a broad range of polycarbonate (PC) copolymers. ・ Wide application scope—including mobility, electrical/electronics, and healthcare. Covestro has inaugurated its first industrial-scale polycarbonate (PC) copolymer plant at its Antwerp, Belgium facility. The company’s newly developed platform technology combines an innovative solvent-free melt process with a novel reactor concept. [To learn more about plastics, engineering plastics, modified plastics, and other industry knowledge—including extensive material property databases, abundant case studies for material selection, and cost-saving & efficiency-enhancing solutions—visit PlasticLibrary.com!]. This milestone marks the commercialization of PC materials with tunable properties, previously developed and tested at laboratory and pilot scales. The investment totals several million dollars, covering both a pilot line and full-scale production facility. Beyond simplifying the new manufacturing process, integrating the new plant with four existing PC production lines at the Antwerp site offers strategic advantages—combining global production scale with the flexibility of a standalone unit. Sucheta Govil, Chief Commercial Officer of Covestro, at the inauguration ceremony of the Covestro PC copolymer production plant. Photo courtesy of Covestro. New process enables material innovation Sucheta Govil, Covestro’s Chief Commercial Officer, stated: “This new manufacturing process is the world’s first—and only—enabling us to offer a broad portfolio of innovative material solutions.” “With this new plant, we can now produce and launch new polymer materials at industrial scale faster than ever before.”

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Covestro plans to close three polycarbonate lines and a bisphenol A unit at its Antwerp plant amid high energy costs and Asian competition. The company will retain one line for specialty resins, keeping the site as a core European production node.

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