NEW DELHI/SEOUL –
Petrochemical producers in Europe and Asia are in survival mode as years of capacity building in their key market of China and high energy costs in Europe have squeezed margins for two years in a row, forcing companies to consolidate.
The sector’s weakness is a concern for the global oil industry, which is looking to petrochemicals to maintain profitability as demand for transportation fuels declines in the coming years due to the energy transition.
Major producers in Asia and Europe are selling assets, closing older plants and upgrading facilities to use cheaper feedstocks such as ethane instead of naphtha to cut costs, industry executives and analysts say.
