ExxonMobil Plans Permanent Shutdown of Steam Cracker

Singapore, December 4, 2025 – ExxonMobil (XOM) is set to permanently shut down operations at the older of its two steam crackers on Jurong Island, Singapore, starting in March 2026, according to multiple sources familiar with the matter. The closure is expected to be completed by June 2026 and reflects a broader trend of capacity reductions in the global petrochemicals sector, driven by oversupply and industry losses.

The affected plant, which began operations in 2002, is part of Exxon’s strategic efforts to optimize its Asian operations while responding to overcapacity in ethylene and derivative markets, particularly from China, the world’s largest consumer of petrochemical products.

---

Industry Context and Regional Consolidation

The shutdown comes amid challenges facing chemical producers in Asia, including profit erosion caused by surplus capacity and volatile feedstock prices. South Korea, another key petrochemical hub, is also experiencing similar consolidation pressures.

Exxon’s move follows the start-up of its new steam cracker in Huizhou, China, earlier this year, capable of producing around 1.6 million tons per year of ethylene. This new facility aligns with the company’s strategy to streamline global production and focus on higher-margin operations.

---

Impact on Local Buyers and Supply Chains

Local buyers in Singapore are expected to shift their purchases to the two remaining ethylene producers, including Exxon’s newer 1.1 million tpy cracker, which started in 2013. Over the past two years, Exxon has gradually scaled down term contract volumes with Singapore-based customers, reflecting reduced domestic supply from the older cracker.

Catherine Tan, senior manager for chemical analytics at ICIS, noted that continuing some polyolefin derivative units after the cracker’s shutdown may require purchasing external feedstock. She explained:

“Unless very low olefins prices can be secured, running the polyolefin units economically is unlikely in the long term.”

---

Reduced Naphtha Imports and Workforce Adjustments

The closure is expected to cut Exxon’s naphtha imports to Singapore. Data from ship-tracking firm Kpler indicates that Exxon imported 1.5 million metric tons of naphtha in the first 11 months of 2025, down from nearly 2.5 million tons in 2024.

In addition, Exxon has announced plans to reduce its Singapore workforce by 10-15% by 2027. The company recently sold its petroleum retail business in the city-state to Indonesia’s Chandra Asri, a co-owner of Aster Chemicals, which operates the Bukom refinery-petrochemical complex.

Despite the closure, Exxon has also expanded operations at its Singapore refinery, including a new 592,000 barrel-per-day refining unit, signaling ongoing investment in selective high-value operations.

---

Conclusion

ExxonMobil’s decision to permanently shut its older Jurong Island steam cracker is part of a broader strategy to streamline petrochemical capacity in Asia, reduce feedstock imports, and optimize high-margin operations. While some polyolefin units may continue with purchased feedstock, the closure marks a significant shift in Singapore’s ethylene production landscape and reflects ongoing consolidation in the Asian petrochemical industry.