LyondellBasell and Covestro Announce Permanent Closure of Maasvlakte’s POSM Production Unit
March 18, 2025 – In a joint statement, LyondellBasell (LYB) and Covestro announced the permanent closure of the Propylene Oxide Styrene and Monomer (POSM) production unit (PO11) at the Maasvlakte site in the Netherlands. This decision comes after a meticulous evaluation process and is primarily driven by the persistent challenges facing Maasvlakte’s profitability.
Global Overcapacities
The global chemical industry has been grappling with overcapacities for several years. This situation has intensified due to increased production in Asia, which has resulted in a significant surge in imports to Europe. The oversupply has led to intense price competition and reduced margins for European producers like LyondellBasell and Covestro.
Increased Imports from Asia
Asia’s chemical industry has been growing rapidly, leading to an oversupply of chemicals in the global market. This has resulted in a substantial increase in imports to Europe. The European chemical industry has been struggling to compete with the lower production costs in Asia, which has further impacted the profitability of Maasvlakte’s POSM production unit.
High Costs of European Production
European production costs have been on the rise due to various factors, including energy prices, labor costs, and regulations. These costs have made it increasingly difficult for European chemical producers to remain competitive in the global market. The high production costs at Maasvlakte’s POSM unit have been a significant factor in the decision to close the facility.
Impact on Consumers
The closure of Maasvlakte’s POSM production unit may result in higher prices for certain polystyrene products in Europe. Polystyrene is a common plastic used in various applications, including packaging, insulation, and automotive parts. The increased demand for imports from Asia may lead to supply chain disruptions and longer lead times for European customers.
Impact on the World
The closure of Maasvlakte’s POSM production unit is expected to have a ripple effect on the global chemical industry. European producers may further reduce their production capacities, leading to a potential shortage of certain chemicals in the region. This could result in increased imports from other regions, such as the Americas and the Middle East. The closure may also lead to job losses in the Netherlands and potentially impact the local economy.
Conclusion
The decision by LyondellBasell and Covestro to permanently close Maasvlakte’s POSM production unit is a significant development in the global chemical industry. The persistent challenges of overcapacities, increased imports from Asia, and high production costs have made it difficult for European producers to remain competitive. While the closure may result in higher prices and potential supply chain disruptions for European consumers, it may also lead to increased imports from other regions and potential job losses in the Netherlands. The ripple effects of this decision are expected to be felt throughout the global chemical industry.
- LyondellBasell and Covestro announce permanent closure of Maasvlakte’s POSM production unit
- Decision driven by global overcapacities, increased imports from Asia, and high production costs
- European consumers may face higher prices and potential supply chain disruptions
- Ripple effects expected to be felt throughout the global chemical industry
