Two Major Chemical Companies Collapse in May as the Global Industry Faces a Broad Downturn

Since May 2026, the global chemical industry has entered a period of widespread weakness. Across the United States, Japan, Europe, and China, many well-known chemical companies have been overwhelmed by overcapacity, soaring costs, and sluggish demand, leading to bankruptcies, plant shutdowns, business divestitures, and large-scale layoffs.

UK and US Companies Fall Into Insolvency as Cash Flow Pressure Intensifies

Trinseo filed for Chapter 11 restructuring on May 13. The U.S.-based specialty materials producer is a major global supplier of polycarbonate, styrene-butadiene latex, and ABS resins. However, the company has faced continuous operational pressure in recent years, posting a net loss of USD 546 million in 2025 and another USD 116 million loss in the first quarter of 2026. Its total debt burden reached USD 2.8 billion.

Following the restructuring, Trinseo is expected to eliminate approximately USD 2 billion in debt, with existing lenders receiving 100% ownership of the reorganized company. The company’s president stated that the move is intended to “strengthen the balance sheet and ensure uninterrupted operations.” Rights of general unsecured creditors are expected to remain unaffected.

Meanwhile, Plastic Energy entered administration on May 11. The British chemical recycling company developed its proprietary TAC™ pyrolysis technology, capable of converting waste plastics into synthetic oil, and operates two commercial recycling plants in Spain. However, the prolonged downturn in Europe’s plastic recycling sector and severe cash flow pressure ultimately pushed the company into insolvency.

Administrators are currently seeking potential buyers for the business. Notably, the two Spanish operating entities were not included in the insolvency proceedings and continue normal operations.

Japanese Chemical Giants Accelerate Exit From Traditional Businesses

Asahi Kasei announced on May 12 that it will shut down multiple production lines at its Mizushima complex, including styrene monomer, low-density polyethylene, and high-density polyethylene facilities, while also terminating a 200,000-ton-per-year acrylonitrile line.

The company explicitly stated that the move represents an exit from “business areas with persistently weak profitability.” Management acknowledged that Japan’s ethylene crackers have remained below breakeven levels for 44 consecutive months, with current operating rates hovering around only 70%. A four-year transition period has been established, with full shutdown expected by 2030.

On the same day, Mitsubishi Chemical announced its complete withdrawal from the PBS biodegradable plastics business in Thailand. The joint venture production facility operated with PTT Global Chemical had already ceased operations in December 2025 due to weaker-than-expected market demand and poor long-term profitability.

The company stated that sales will end once existing inventories are depleted, after which the facilities will be dismantled. This is not the company’s first strategic retreat; Mitsubishi Chemical has previously exited PET bottle, coke, and needle coke businesses as part of broader restructuring efforts.

European and US Companies Cut Capacity, Sell Assets, and Reduce Headcount to Survive

DOMO Chemicals announced on May 6 the sale of its entire Engineering Materials business to an affiliate of Lone Star Funds.

The transaction covers the full scope of the engineering materials division, including production sites in Premnitz, Germany; Arco, Italy; and Gorzów, Poland, along with supporting functions in Belgium, Germany, Spain, Poland, and India. International entities in China, India, South Korea, and the United States are also included in the deal.

In addition, the transaction covers the application development center in Lyon, France, color masterbatch industrial operations, and the intellectual property portfolio of the TECHNYL® brand, which has a history spanning more than 70 years.

Celanese announced on May 5 that it will shut down its nylon 66 facility in Singapore while optimizing two production units in the United States. The company stated that the move aims to “enhance competitiveness and streamline production layout.” The Singapore plant is expected to continue operating until the end of July 2026 to ensure an orderly shutdown process.

Global carbon compounds and commercial wood treatment supplier Koppers plans to close its Illinois facility by the end of 2026, affecting approximately 120 employees. The plant primarily produces preservative chemicals for railroad and wood product treatment applications.

The company cited aging infrastructure, rising operating costs, and increasing environmental compliance expenses as key reasons for the closure. Production will be transferred to facilities in Georgia and Ohio. Koppers expects to incur restructuring charges of USD 30 million to USD 35 million during fiscal year 2026.

Wacker Chemie announced on May 8 that it will cut approximately 1,600 jobs in Germany, representing nearly 10% of its domestic workforce. The reductions include 1,300 positions at its Burghausen headquarters, 200 positions at the Nünchritz site, and 60 positions in the Munich region.

The restructuring aims to reduce annual costs by approximately EUR 300 million.

Meanwhile, UK waste management giant Viridor announced on May 12 that it is proposing to halt its European chemical recycling operations in Oslo, Skive, and Malmö.

The company stated that weak demand, regulatory uncertainty, and competition from low-cost virgin plastics have made advanced plastic recycling “commercially unviable without policy changes.”

Chinese Chemical Companies Also Enter Retrenchment Mode

Shanshui Technology announced that its wholly owned subsidiary Changxing Chemical suspended all operations starting May 1.

The subsidiary primarily produces o-aminobenzenesulfonic acid with an annual capacity of 2,400 tons. Persistent losses caused by elevated raw material costs and weak downstream demand led the company to conclude that “continuing production would further intensify losses.” In 2025, the subsidiary accounted for 3.91% of the group’s consolidated revenue.

Shandong Huiyuan Chemical, established less than two years ago, is already facing a potential change in ownership. On May 6, the company disclosed that its controlling shareholder intends to transfer a 51% stake.

The company recorded a net loss of RMB 350,000 in 2025 and remained unprofitable in the first quarter of 2026. Completion of the transaction would result in a change of control.

Meanwhile, Hengli Petrochemical plans to suspend operations at its Singapore subsidiary in late May, potentially affecting around 100 employees through layoffs or reassignment.

The subsidiary mainly handles petroleum and petrochemical derivatives trading. Earlier, the parent company was placed under U.S. sanctions over alleged purchases of Iranian crude oil.

The collapse of Trinseo and Plastic Energy, the large-scale retreat of Japanese chemical producers, and the aggressive restructuring measures taken by DOMO Chemicals, Celanese, Koppers, and Wacker Chemie all point to the same reality: the global chemical industry is entering a prolonged and painful adjustment cycle.

What began as isolated financial pressure has evolved into a broad industry-wide contraction, reshaping the future structure of the global chemical sector.