Indorama shuts plants in Australia

The Thai chemical firm Indorama says it will close its ethylene oxide and derivatives facilities in Botany Bay, Australia, by the end of this month. Indorama says it is closing the facilities because Qenos Olefins, Australia’s only supplier of ethylene—the key feedstock for the facility—has ceased production.

Indorama purchased the plants in 2020 as part of a $2.1 billion acquisition from Huntsman. The plants have an annual capacity to produce 40,000 metric tons (t) of ethylene oxide, 35,000 t of surfactants, 5,000 t of glycol ethers, and 16,000 t of glycols.

Indorama’s plant closures will reduce the company’s presence in Australia to just an office and technical center in Melbourne. The company did not disclose the number of jobs that would be lost as a result of the closures. Meanwhile, the firm says it will continue to supply its customers in Australia and New Zealand with imports.

Qenos had operated ethylene crackers in Botany Bay and near Melbourne. Qenos, which was also Australia’s only producer of polyethylene, announced on April 17 that it had gone into voluntary administration.

The permanent closure of many more ethylene plants around the world due to overcapacity is in the cards, according to a recent report by the consulting firm Wood Mackenzie. The company forecasts that “a series of unprecedented challenges to the global ethylene industry means that as much as 24% of global capacity is now under some threat of permanent closure.” Of the 330 ethylene crackers in the world, 114 are at risk, representing about 55 million t per year of ethylene production, Wood Mackenzie states.

Crackers in Asia are especially under pressure. “China’s substantial investments between 2020–2027 have reshaped global supply dynamics, leading to a structural surplus in Asia and persistent low or negative profit margins,” Kelly Cui, principal petrochemical analyst at Wood Mackenzie, says in a press release.