Recently, at the annual conference of the European Petrochemicals and Chemicals Association (EPCA) in Berlin, participants were mostly pessimistic about the market outlook for 2025. Participants said that market sentiment in Europe this year is more pessimistic about the prospects for demand recovery into 2025. This is because end-user demand has continued to weaken this year, dragging down the European olefins market.
One PVC producer said, “We are not optimistic about the market outlook for next year. We just want to get through 2025 and believe the market will eventually pick up.” Despite capacity consolidation in the European olefins industry, as expected, market participants insisted that the industry needs to contract capacity further to achieve full optimization.In April, ExxonMobil and SABIC announced plans to shut down the naphtha crackers at their respective petrochemical plants in Graveson, France, and Heron, the Netherlands, respectively. The announced closures will reduce the European market by approximately 1.1 million tons of ethylene and propylene capacity per year.In May, LyondellBasell announced the formal launch of a strategic assessment of the European assets of its Olefins and Polyolefins divisions, as well as its Intermediates and Derivatives divisions.
The annual EPCA meeting discussed capacity consolidation in addition to upcoming plant overhauls in 2025. Confirmed are Total Energy’s cracker in Gonfreville, France, which is scheduled for a planned overhaul from mid-April to mid-June 2025; and Inexpress’s naphtha cracker in La Villa, France. The overhaul period is from September 2025 to January 2026.
From the current dynamics of the European ethylene market, as the end of the year approaches, derivative demand remains weak. Supply remains balanced during the overhaul of some European crackers. However, market sources warned that the resumption of these crackers could result in oversupply in an environment of low buying appetite across the value chain. One producer said, “We are still in the shutdown and maintenance season, thus keeping supply balanced, but if these crackers restart, the market will be oversupplied.”
Prices weakened due to weak spot trading activity and weak fundamentals. According to Platts data, the spot price for 3- to 30-day forward free delivery Northwest European ethylene was €890 per tonne as of October 10th. This was down €43.50 per ton from the previous month.