ExxonMobil Corporation has commenced the phased shutdown of its first steam cracker on Singapore’s Jurong Island as the global petrochemicals sector continues to face pressure from oversupply and weakening margins.
The 2002 facility, which has operated for more than two decades, will begin winding down from March, with a full cessation expected by June, according to industry sources familiar with the development.
The transition follows a prolonged period of margin compression across Asia, driven largely by significant capacity additions in China.
Petrochemical producers in the region have posted consecutive quarterly losses as product spreads remain below breakeven levels. ExxonMobil did not provide direct confirmation of the shutdown, stating only that it does not comment on market speculation.
However, operational adjustments in recent years indicate a deliberate scale-back. The company has gradually reduced term-contract volumes to customers in Singapore over the past two years, a development that aligns with plans to retire the older cracker.
Market participants expect the shutdown to shift demand to Singapore’s remaining ethylene producers. The affected plant is one of two crackers operated by ExxonMobil on Jurong Island.
Its newer 1.1 million tonnes-per-year cracker, commissioned in 2013, will continue to run as the company consolidates production around more efficient assets. The company’s start-up of a 1.6 million tonnes-per-year cracker in Huizhou, China, earlier this year also reflects an ongoing repositioning of regional capacity.
The closure will reduce ExxonMobil’s naphtha import requirements in Singapore. Data from ship-tracking firm Kpler shows the company imported approximately 1.5 million metric tonnes of naphtha in the first eleven months of the year, compared with nearly 2.5 million tonnes for all of 2024.
Analysts expect the decline to accelerate as the plant moves toward full shutdown. While ExxonMobil is evaluating the option of purchasing external olefins to support some derivative operations, analysts note that such an approach will only be viable if feedstock can be secured at substantially lower prices.
The development is consistent with consolidation observed in other regional petrochemical hubs, including South Korea, where producers have also begun rationalising assets following extended losses.
Industry analysts link the sector’s current challenges to China’s large-scale commissioning of integrated refinery-petrochemical facilities, which has significantly expanded global output and eroded margins for standalone crackers.
ExxonMobil’s shift in Singapore is part of a broader portfolio adjustment. The company earlier announced plans to reduce its Singapore workforce by 10–15% by 2027 and recently agreed to sell its petroleum retail business in the country to Indonesia’s Chandra Asri.
Despite the retirement of the older cracker, ExxonMobil continues to invest in core downstream operations, including the commissioning of a new refining unit at its 592,000 barrels-per-day Singapore refinery in September.
The phase-out of the 2002 Jurong cracker reflects the structural adjustments taking place across the global petrochemicals value chain. With persistent oversupply and evolving demand patterns, producers are prioritising high-efficiency, low-cost assets and retiring plants that no longer meet profitability benchmarks.
ExxonMobil’s latest move realigns its regional portfolio and reinforces its long-term strategy to optimise output while maintaining a strong presence in Asia’s petrochemical market.