Global Chemicals Industry Needs Closure of ~7.5% Olefin Capacity by 2030 to Restore Normal Operating Rates
According to a new report from Bain & Company, the global chemicals industry will need to close approximately 7.5%—or about 35 million metric tons—of olefin production capacity by 2030 in order to return to normal operating rates. Despite significant plant closures already occurring, utilization levels are expected to remain below historical averages through that period due to insufficient demand growth alone being able to absorb the excess supply. The report highlights a structural reset rather than an ordinary market downturn, driven largely by chronic overcapacity and low feedstock costs dividing producers globally. China's ongoing capacity expansion in base chemicals and growing strength in specialty products is intensifying competitive pressures on Western firms. Chinese chemical companies are now investing heavily in R&D and forming strategic partnerships to strengthen their position in high-margin specialties. The report warns that the recent price rise due to geopolitical tensions offers only a temporary window for strategy reset, cautioning against mistaking it as an industry recovery. Companies must adopt more selective investment strategies focused on regions or products where they can establish competitive advantages.
Topics: capacity closures chemical industry China's role in chemicals market global trade flows