SINGAPORE: ExxonMobil plans to wind down operations at the older of its two steam crackers on Singapore's Jurong Island from March, four sources familiar with the matter said, part of a global petrochemicals sector trend to reduce capacity amid industry losses.
The shutdown of the plant, which opened in 2002, is expected to be complete by June, two of the sources said. The sources asked not to be identified because they were not authorised to speak to the media.
The imminent shutdown of the United States major's first cracker in the Asian oil trading hub comes as chemical producers grapple with losses from overcapacity led by China, the world's largest consumer of petrochemicals used to make products ranging from plastics and clothes to shoes and cars.
"As a matter of practice, we do not comment on market rumours or speculation," an ExxonMobil spokesperson said in response to Reuters' queries.
The planned shutdown comes after Exxon's start-up earlier this year of a new steam cracker in the southern Chinese city of Huizhou, which can produce around 1.6 million tonnes per year of ethylene.
Exxon has in the past two years gradually scaled down term contract volumes with customers in Singapore, a second of the four sources said.
Local buyers will likely switch to offtake from the two remaining ethylene producers in Singapore, traders said.
Exxon has a second 1.1 million tonnes per year cracker at Jurong Island, which started operations in 2013.
South Korea, another major petrochemical hub in Asia, is also seeing sector consolidation.
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