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LyondellBasell to Close Oldest PP Unit Amid Market Challenges

LyondellBasell is slated to close one of its two Polypropylene (PP) units in Brindisi, Italy by the end of the year. This will remove around 500 million pounds of annual resin capacity. The unit which has been operating since 2002 is the oldest to use Spherizone technology and produces higher-end PP material used in automotive, construction, pipes and household products. The decision comes amid a weak demand environment, particularly in Europe as high interest rates and inflation have been contributing to a reduction in consumer spending.

This older and relatively small resin reactor is less efficient than the new larger scale plants that continue to be built around the world. Further, the plant is not fully integrated rather it sources much of its Propylene feedstocks from Versalis' Brindisi cracker. A growing number of Polypropylene plants are starting to use Polymer Grade Propylene (PGP) monomer derived from NGL feedstocks produced by lower cost Propane Dehydrogenation Units (PDH), rather than Propylene which has traditionally been refined from the higher cost Crude Oil stream and or heavy steam crackers.

The closure marks another strategic shift for LyondellBasell, which also shut down a color concentrates plant in Akron, Ohio, earlier this year. LyondellBasell aims to strengthen its other assets in higher-value markets. "The closure aligns with our strategy to focus on more profitable ventures," said Guilfoyle, Senior VP of olefins and polyolefins. Consultations with trade unions and stakeholders have begun, and PP supplies will continue until the closure is finalized by year-end.

The move highlights the survival of the fittest mentality amidst the ongoing evolution in the Petrochemical and Manufacturing industries, where strong competition from large international players push to optimize efficiency with newer technology and world-class scale facilities.

--The Plastics Exchange

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