"Supply Cut"! Major Chemical Giants — BASF, Dow, and Chemours — Concentrated Plant Closures!

Recently, a listed chemical company’s stock price hit an all-time high, surging nearly 300% in just two months. The catalyst behind this explosive rally is truly staggering! LyondellBasell and Covestro have permanently shut down their combined 315,000-ton-per-year propylene oxide (PO) production capacity in the Netherlands! This has instantly torn a gaping hole in the global chemical supply chain! As a result, PO prices surged by 200 RMB/ton in just one week—breaking through the historic threshold of 7,750 RMB/ton! Over 1 million tons of PO capacity cut — multiple major PO producers permanently halt operations. Domestic PO producers and related enterprises are collectively experiencing a ‘surge’ in prices, primarily due to overseas giants permanently shutting down PO production. Globally, PO capacity is heavily concentrated among chemical titans such as DuPont, LyondellBasell, Shell, BASF, and Covestro. Recently, escalating Russia-Ukraine tensions—coupled with carbon tariff policies—have prompted leading enterprises to publicly declare a ‘standstill’. LyondellBasell, Covestro, Shell, and Dow Chemical have successively ceased or exited PO production, resulting in over 1 million tons of direct overseas capacity reduction—significantly reshaping PO market supply-demand dynamics. In China, major PO producers include Wanhua Chemical, Binhu Shares, Qixiang Tengda, Hongbaoli, and Yida Shares. However, because low-end PO capacity causes severe environmental pollution, the global—and especially domestic—phase-out of such outdated capacity has accelerated in recent years. The National Development and Reform Commission’s ‘Industrial Structure Adjustment Guidance Catalogue (2024 Edition)’ explicitly classifies the chlorohydrin process (a PO production method) as ‘restricted’, mandating mandatory elimination after December 31, 2025 for installations failing to meet specific criteria. This means not only will over 1 million tons of overseas capacity be reduced, but a substantial volume of domestic capacity will also be phased out. Amid these combined domestic and international pressures, the PO supply-demand equilibrium may well break down—making price hikes a widely anticipated outcome. Even more alarmingly, upstream raw materials for coatings—including titanium dioxide (TiO₂) and toluene diisocyanate (TDI)—are now facing acute supply shortages. Foreign TiO₂ giants shutter plants—supply stability in doubt. Titanium dioxide faces similar challenges: Tronox, Chemours, and Venator have recently closed factories, involving tens of thousands of tons of capacity. Tronox announced the closure of its titanium dioxide plant in Botlek, the Netherlands—a facility with an annual capacity of 90,000 tons. Shutting it down aims to optimize remaining capacity and reduce overall manufacturing costs. Chemours closed its titanium dioxide plant in Taiwan, cutting ~50,000 tons/year of capacity, to improve profitability and quality within its TiO₂ business. Venator announced the shutdown of its Duisburg, Germany titanium dioxide plant (50,000 tons/year), and rationalized its European TiO₂ capacity totaling 130,000 tons/year—relocating specialty TiO₂ production from Duisburg to Uerdingen. Its 80,000-tons/year TiO₂ plant in Scarlino, Italy, is also offline. As a critical raw material for the coatings industry—providing opacity, whiteness, and gloss—these factory closures will directly disrupt the global TiO₂ supply landscape, thereby impacting coating manufacturers’ raw material procurement costs and supply reliability. Multiple TDI units halted—industrial anti-corrosion coating raw materials constrained. Over recent years, overseas TDI capacity has been gradually shrinking. BASF shut down its TDI and precursor facilities at its Ludwigshafen site; Japan’s Tosoh halted TDI production at its Nanyo plant; and Argentina’s Petroquímica Río Tercero announced the cessation of operations at its Córdoba TDI plant—whose annual TDI capacity stood at 28,000 tons.

Propylene Oxide: A Core Chemical Raw Material—A High-Prosperity Sector Accelerating Its Breakout

In 2020, China’s dimethyl carbonate (DMC) capacity stood at 600,000 tons/year, with 80% produced via the propylene oxide (PO) transesterification route. With the rapid growth of lithium-ion batteries, DMC—owing to its excellent performance—has become a key solvent in lithium-ion battery electrolytes. From 2020 to 2025, its compound annual growth rate (CAGR) exceeds 30%. Zhejiang Petrochemical and Shidashenghua are expanding capacity using the ethylene oxide (EO) route; while Hualu Hengsheng and Anhua Group are scaling up via coal-based processes. PO production processes involve certain technological barriers. Mainstream PO production technologies include the chlorohydrin process, co-oxidation processes (PO/SM, PO/TBA, and CHP methods), and the direct hydrogen peroxide oxidation (HPPO) process. Globally, the chlorohydrin and co-oxidation processes remain the dominant industrial-scale PO production methods. Currently, China’s PO capacity remains dominated by the chlorohydrin process—accounting for approximately 54%—while the two co-oxidation routes together account for about 33.5%, and the HPPO process accounts for roughly 12.5%. The chlorohydrin process features mature technology, relatively safe operation, and lower capital investment—but generates large volumes of wastewater and solid waste, requiring substantial investment in integrated treatment of the three wastes (waste gas, water, and solids). Due to mounting environmental pressure, new chlorohydrin-based capacity is restricted, and smaller-scale units are gradually exiting—leading to a tight supply-demand balance for PO. U.S.-based Dow Inc., Germany’s BASF, Japan’s Mitsui Toatsu, Asahi Glass (AGC), and Showa Denko, China Petroleum & Chemical Corporation (Sinopec), and Italy’s Enichem hold proprietary chlorohydrin process technologies. Domestically, the chlorohydrin process dominates, with nearly half of total capacity concentrated in Shandong Province—granting Shandong de facto ‘pricing power’ over China’s PO market. In April 2019, the draft of the State’s ‘Industrial Structure Adjustment Guidance Catalogue’ encouraged PO projects using direct oxidation (≥150,000 tons/year) and co-oxidation (≥200,000 tons/year), while restricting chlorohydrin-based PO production. No new chlorohydrin-based capacity is being approved; the method is slated for gradual phase-out—paving the way for greener, electrolyte-compatible chlorohydrin-based production lines. PO Market Landscape Globally, PO production is highly concentrated. Asian capacity is centered in China, Saudi Arabia, Singapore, Japan, Thailand, and South Korea; while in Europe and North America, capacity is held by a handful of giants—DowDuPont, LyondellBasell, Shell, Huntsman, and BASF. Domestically, PO capacity is concentrated in East China, where the region accounts for 79% of national polyether capacity—with Shandong alone contributing 38%. As of June 2021, China had 20 operational PO producers, with CR5 (top five) and CR8 (top eight) concentration ratios standing at 47% and 65%, respectively. The largest single producer is CNOOC Shell, with an annual PO capacity of 580,000 tons. Regarding upcoming projects, according to Baichuan Yingfu data, newly commissioned PO capacity totaled 2.35 million tons/year in 2021. By May, three producers had commenced operations—adding 570,000 tons/year collectively—while the remaining 1.78 million tons/year under construction is expected to come online progressively in the second half of the year. From the supply side, some PO projects originally scheduled for commissioning in 2020 were delayed due to pandemic impacts—including Sinochem Quanzhou’s 200,000-ton/year PO/SM unit, Jinling Huai’an Phase I’s 150,000-ton/year HPPO unit, CNOOC Shell’s 290,000-ton/year PO/SM unit, and Tianjin Dagou’s 200,000-ton/year PO/SM unit. These delayed capacities are now expected to gradually enter the market in 2021, exerting some downward pressure on PO prices.

Propylene Oxide Market Set for Strong Expansion | Dow Inc., LyondellBasell Industries N.V., BASF SE

Jul 16, 2026

Driven by rising polyurethane demand in construction and automotive sectors, the global Propylene Oxide market anticipates robust growth. Key players Dow, LyondellBasell, and BASF are expanding capacity and adopting sustainable production technologies.

openPR.com

2026-07-14

BofA Securities Adjusts Amcor Price Target to $51 From $48, Maintains Buy Rating

2026-07-16

Propylene Oxide Market Set for Strong Expansion | Dow Inc., LyondellBasell Industries N.V., BASF SE

2026-07-16

PureCycle Partners with RM TOHCELLO and Mitsui for Recycled BOPP Film Production

Propylene Oxide Market Set for Strong Expansion | Dow Inc., LyondellBasell Industries N.V., BASF SE

FAQ