Why are US chemical plants—especially polystyrene (PS) producers—shutting down despite the country's low energy and feedstock costs?

US chemical plants, particularly older standalone PS units like INEOS Styrolution’s, are shutting down because they lack vertical integration and produce commodities exposed to severe global overcapacity—especially from China’s surge in new capacity since 2022—leading to persistently weak demand, declining US PS demand for a decade, global PS operating rates falling below 70% in 2022 and projected to keep declining through at least 2034, and US PS contract margins collapsing to double digits in 2024 for standalone GPPS due to structural cost disadvantages.

How did the closure—and subsequent reopening—of the Strait of Hormuz affect US chemical producers?

The Strait of Hormuz closure temporarily shielded US producers from global oversupply by disrupting Middle Eastern exports and Asian feedstock supplies, allowing US plants to run at full rates and sell into a tighter market; however, its reopening is expected to restore Middle Eastern exports and Asian naphtha supplies, enabling higher Asian refinery and ethylene plant run rates, thereby reintroducing excess global supply that could extend the current four-year downturn through the end of the decade.

US Wave of Chemical Shutdowns Accelerates with PS Closures

Jun 25, 2026

US chemical producers including INEOS Styrolution and Westlake are accelerating plant shutdowns amid a multi-year downturn driven by excess global capacity. Reopening the Strait of Hormuz threatens to worsen supply gluts in plastics, further pressuring margins through the decade.

icis

2026-06-18

INEOS Styrolution to Close US PS Plant in Illinois

2026-06-23

Ineos Styrolution Plans to Shut Down US Polystyrene Plant

2026-06-25

US Wave of Chemical Shutdowns Accelerates with PS Closures

US Wave of Chemical Shutdowns Accelerates with PS Closures

FAQ