On October 17, LyondellBasell's PP2 unit in Brindisi, Italy, officially ceased operations. The unit has a nominal capacity of 230,000 tonnes/year and was commissioned in 1982. It was the world's first polypropylene line to adopt the Spheripol process and produced only general-purpose homopolymer PP for packaging applications.
The immediate trigger for the shutdown was the cut-off of propylene supply. The Brindisi site itself lacks propylene cracking capability and previously obtained up to 220,000 tonnes/year of propylene feedstock from Eni Versalis's Brindisi cracker. That cracker was permanently shut down in April 2025, completely severing the local supply channel. Since then, feedstock has had to be shipped in from LyondellBasell's other Italian sites, and freight costs have completely eroded the unit's economics.
Europe PP Demand Weak
In addition, European PP demand remains persistently weak. PE/PP demand completely "disappeared" in May, with converters halting purchases after panic buying in March-April. Stretch film producers are running at only 50% utilization, and blown film producers at approximately 80-85%. Despite producers' production cut measures, the European PP market remained in a clear state of oversupply in September. The October propylene contract price rose by €80/tonne, but producers have almost no ability to fully pass this through to PP prices.
Since 2024, Europe has closed, idled, or announced plans to close ethylene, propylene, PP, PE, and vinyl chloride chain capacity totaling nearly 11 million tonnes/year, of which PP accounts for approximately 965,000 tonnes/year. LyondellBasell is one of the major companies involved in this wave of consolidation, alongside SABIC, ExxonMobil, and Versalis, which have also shut down or sold assets during the same period.
Symbolic Price Listing, No Buyers
According to Italian chemical industry union Uiltec, LyondellBasell had listed the Brindisi PP2 unit for sale at a symbolic price, but found no buyers in the market.
Because the unit has no associated cracker, the residual value of an isolated polymer unit in Europe's basic chemicals asset valuation system approaches zero. Eni has commissioned JPMorgan to seek a buyer for the Versalis cracker. If that transaction is completed, it could theoretically restore propylene supply and improve the feasibility of transferring PP2, but as of the shutdown, no deal had been reached.
LyondellBasell's European Asset Contraction
LyondellBasell's Europe, Asia & International (EAI) Olefins & Polyolefins segment recorded EBITDA of -$432 million in Q2 2026, including a pre-tax book loss of $734 million from the sale of four European production sites.
The company's overall adjusted EBITDA for Q2 was $2.1 billion, mainly contributed by North America, where O&P Americas EBITDA reached $1.3 billion. North American polyethylene domestic sales volume increased approximately 3.5% quarter-on-quarter, the best quarterly level since Q1 2021.
The company plans to reduce the operating rate of its European O&P units to 70% in Q3, below the previous target of 80%.
CEO Vanacker explicitly listed the Brindisi shutdown as part of portfolio optimization during the Q2 earnings call, stating that remaining European assets will focus on integrated sites and high-value-added applications.
