Global Chemical Supply Chain Crisis 100 Million Tons of Capacity Cut Propylene Oxide and Titanium Dioxide Prices Soar

The global chemical industry faces a major crisis, with over 100 million tons of production capacity permanently shut down. LyondellBasell and Covestro announced the closure of their 315,000-ton propylene oxide facility in the Netherlands, triggering a €200/ton price surge in a week, breaking the €7,750/ton record.

Major producers like Dow, BASF, Shell, and Mitsubishi Chemical are reducing capacity due to rising energy costs, carbon taxes, and geopolitical tensions. The shutdowns have disrupted the propylene oxide market, creating supply-demand imbalances and price hikes for related products like TDI and epoxy resins.

The titanium dioxide (TiO₂) sector is also in turmoil. Leading players Chemours, Tronox, and Venator have closed multiple plants in Europe and Asia, cutting global capacity by tens of thousands of tons. Titanium dioxide, critical for coatings and paints, faces severe supply shortages, driving up raw material costs.

Meanwhile, BASF, Dow, and Covestro have halted production of key chemicals like polyether polyols, hexanediol, and methyl methacrylate (MMA), impacting coatings, adhesives, and polyurethane manufacturers. The closures threaten supply stability and profitability across the chemical value chain.

With raw material costs soaring, companies face profit margin erosion and delivery delays, leaving small and medium enterprises at risk of survival.