The reshuffling and capacity clearing of the global chemical industry are advancing at an unprecedented pace. Recently, several chemical giants have announced bankruptcy or permanent closure, and the strategic contraction trend in the industry during the cold winter has become increasingly evident.
The German chemical market has been hit hard again. LEUNA Polyamide, a manufacturer of caprolactam and polyamide headquartered in Leuna, reluctantly pressed the pause button less than three months after being acquired by Dow Chemical. The company submitted a bankruptcy application to the Halle District Court on June 17, 2026. According to its statement to customers, the geopolitical situation, especially in the Gulf region, has led to a surge of 40% to 100% in raw material prices, coupled with major suppliers demanding prepayments, resulting in much higher than expected liquidity demand. Due to time constraints and the inability to establish sufficient financial buffers, the company stated that it is unable to continue operating without initiating self bankruptcy proceedings. At present, existing orders will be fulfilled as usual, while new orders will be reassessed during the bankruptcy review period.
The American market across the ocean is also not immune. On June 17th, INEOS Stysolution, a leading global supplier of styrene products, announced the permanent closure of its polystyrene (PS) production base in Chanahon, Illinois, USA. This factory, which has been in operation since 1960 and has an annual production capacity of 400000 tons, will enter an orderly demolition process and is expected to be completed in the fourth quarter of 2026. Steve Harrington, CEO of Ineos Benz, admitted that the continued pressure on profit margins and industry oversupply pose a serious threat to the survival of the North American business, and continuing to operate the factory is no longer economically feasible. As part of optimizing its asset strategy, the company has decided to reduce its North American polystyrene production base from three to two, retaining only factories in Alabama and Mexico, but the Americas Regional Development Center will continue to be stationed to support innovation.
In fact, these two incidents are just a microcosm of the global chemical giants accelerating their major business adjustments this year. Since the beginning of this year, industry giants have adopted survival or restructuring strategies: Huntsman and Olin announced their merger; BASF, Dow, Wacker, Evonik and other giants have successively laid off employees or shut down some of their businesses; LyondellBasell and Saudi Basic Industries Corporation (SABIC) have chosen to sell their European operations. In addition, as early as May this year, American specialty material supplier Trinseo and British chemical recycling company Plastic Energy had also announced bankruptcy restructuring. Under the dual pressure of rising costs and weak demand, the deep reshuffle of the global chemical industry is still continuing.
Entering Wednesday, the domestic silicone market continued its weak bottoming out pattern. Although the nominal listing prices of upstream individual factories have remained stable, the actual transaction center of the market continues to be under pressure and shifts downwards, highlighting the phenomenon of price inversion. Specifically, the mainstream offers for DMC remain at 14700-15100 yuan/ton, 107 rubber water purification offers are at 14800-15000 yuan/ton, the mainstream offers for raw rubber are at 15500-15800 yuan/ton, and the price of dimethyl silicone oil is temporarily stable at 16200-16800 yuan/ton. However, there is generally room for major players to make concessions in actual negotiations, and the actual transaction price of DMC has fallen back to the range of 14000-14300 yuan/ton. With the expansion of single factory load reduction scale in Shandong, Jiangsu, Zhejiang and other places, high priced quotations are accelerating their return to mainstream transaction prices, and the supply-demand game in the upstream and downstream of the industrial chain has entered a deep water zone.
From a fundamental perspective, cost support is continuously weakening. Upstream industrial silicon is affected by the southwest abundant water period, with a steady increase in operating rates and abundant spot supply; In addition, with the continuous decline of the methanol market, there is further room for further exploration of the comprehensive production cost of individual plants. On the supply side, the frequency of maintenance for individual factories has increased, and the overall operating load of the industry remains at around 65%. After the holiday, some individual factories are facing the risk of inventory accumulation, and high inventory enterprises have a strong willingness to reduce inventory, further lowering the actual transaction center. On the demand side, there is a strong wait-and-see attitude, and downstream end enterprises adopt a multi-dimensional rigid procurement strategy. With the gradual digestion of pre-sale orders in the early stage, the follow-up of new orders from individual factories is weak, and the pressure of shipment has significantly increased.
Looking ahead, the industry expects the industry coordination meeting in mid July to provide a temporary boost to market sentiment. However, overall, the weakening of upstream cost support and the weak demand in the traditional off-season downstream have formed a dual suppression. It is expected that the mainstream market quotation will be mainly stable in the short term, and the actual transaction price may be accompanied by narrow fluctuations.