What are global petrochemical giants doing amid the industry’s ‘low-activity’ phase?

SABIC (Saudi Basic Industries Corporation) Systematically advancing localized cluster development and selective global expansion As the leader of Saudi Arabia’s petrochemical industry, SABIC demonstrates a ‘systems engineering’ mindset in its domestic development, centering on the Jubail Industrial City. It integrates project implementation, deep local integration of industrial chains, low-carbon infrastructure construction, and capital operations. Globally, SABIC’s strategy reflects a more resolute approach to ‘selection and abandonment.’ In Asia—especially China—the company is building a complete, localized supply chain spanning from basic feedstocks to high-performance materials through its flagship project, the Fujian Gulei world-class integrated petrochemical complex, along with complementary investments in engineering plastics compounding facilities. This aims to deeply embed itself in Asia’s high-growth markets. Simultaneously, it is expanding production capacity for polyphenylene ether (PPE) oligomers—used in printed circuit boards (PCBs) for AI servers and 5G base stations—to directly target the high-growth, high-value-added electronics and electrical sector. In stark contrast, following the permanent shutdown of its cracker units in Teesside (UK) and elsewhere, SABIC has escalated its approach toward high-cost European assets—from ‘shut-down optimization’ to ‘strategic exit.’ LG Chem Shifting momentum: focusing on battery materials and green transition LG Chem has submitted a restructuring plan for its domestic petrochemical business, optimizing—or even cutting—certain traditional capacities to cope with industry-wide profitability pressures. In sharp contrast stands its aggressive push and market lock-in within the battery materials sector. Technologically, LG Chem is promoting its innovative ‘Lithium-free Precursor-Free’ (LPF) cathode material and has commenced mass production, aiming to reduce both costs and carbon footprint by shortening the process chain. Market-wise, North America has become its strategic focus. This combination of ‘technological differentiation + localized supply chain + long-term order binding’ underscores its determination to secure the certainty of electrification. Mitsubishi Chemical Group Focusing on high-value-added sectors Mitsubishi Chemical Group is explicitly allocating growth resources to high-value-added material sectors such as electrification, semiconductors, and food packaging. Regarding sustainability, its initiatives are expanding beyond plastic chemical recycling into more advanced carbon-cycling technologies. A chemical recycling facility jointly built with ENEOS at the Ibaraki plant has been completed—marking Mitsubishi Chemical’s circular economy strategy’s transition from R&D demonstration to commercial operation, aiming to establish stable supply capabilities for recycled raw materials. Meanwhile, in collaboration with Mitsubishi Gas Chemical and others, it will launch, in 2026, a carbon-cycling demonstration project that converts CO₂ from steel mills into methanol and then propylene.

With ongoing Middle East tensions, the chemical sector has again surged, triggering a wave of daily trading limits.

Simultaneous attacks on two major production zones have abruptly heightened market concerns over global petrochemical supply. Today, futures contracts for key chemical commodities—including ethylene glycol, methanol, and propylene—sharply rallied on domestic exchanges, with some hitting their daily trading limits. The A-share market responded in kind: the chemical sector led gains across the board, with sub-sectors including chemical fibers, chemical raw materials, and petroleum chemistry experiencing collective surges. Israeli airstrikes hit Iran’s petrochemical core—supply shock strikes directly at export lifelines According to Xinhua News Agency, the Israel Defense Forces (IDF) announced on June 6 that it had conducted an airstrike on a large petrochemical integrated facility in Asaluyeh, southern Iran—the country’s largest petrochemical complex. Israeli Defense Minister Yoav Gallant also confirmed this report. The IDF stated that this strike constituted the second round of attacks against two major Iranian petrochemical complexes, following earlier operations—cumulatively crippling over 85% of Iran’s petrochemical export capacity. Iranian media reported that petrochemical plants in Bushehr Province’s Asaluyeh and South Pars were “attacked by enemy forces,” with several explosions heard. Tasnim News Agency quoted local officials stating that petrochemical production units in Asaluyeh sustained damage; investigations into the extent of damage are underway. Attack on Jubail Industrial City, Saudi Arabia—6%–8% of global petrochemical capacity now under threat According to a report early on June 7 by Iran’s Fars News Agency, cited by Xinhua, an explosion occurred at Jubail Industrial City in northeastern Saudi Arabia—a site involving U.S. capital—following a broad-scale attack. Jubail Industrial City is one of the world’s key petrochemical production bases, with annual output of approximately 60 million tons of petrochemical products—accounting for 6%–8% of global total output. The zone hosts numerous major petrochemical enterprises, including SABIC, the Sadara joint venture (with U.S.-based Dow Chemical), and the Aramco–TotalEnergies joint investment project. Analysts note that the sequential impact on two major production zones—Iran and Saudi Arabia—within the same time window has significantly intensified market concerns regarding the stability of Middle Eastern petrochemical supply. Chemical commodity futures surge collectively; ethylene glycol hits daily limit Geopolitical shocks rapidly transmitted to the commodities market.

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