Thai SCG shuts Long Son Petrochemicals complex amid industry challenges

According to Reuters, Siam Cement Group (SCG) announced it has halted commercial operations at its $5.4 billion Long Son Petrochemicals complex in Vietnam just one month after its launch, citing "low margins" in the chemicals sector. The chemicals industry has been facing significant challenges due to high inventory levels and destocking, putting pressure on multiple companies.

SCG stated that the plant’s restart will rely on "global dynamic demand," according to a statement given to Reuters. Although SCG did not specify a timeframe for the shutdown, the company expects that the chemicals market will remain challenging in fiscal year 2025.

The Long Son complex, located in Vietnam’s Ba Ria-Vung Tau province, began commercial operations on September 30. It is Vietnam’s first integrated petrochemical facility, producing PE, PP and basic chemicals. In a previous Reuters interview, SCG noted the complex’s capacity would reach between 1.3 million to 1.5 million metric tons/year, with Vietnam’s total demand for polyethylene and polypropylene at about 3.3 million metric tons/year.

According to ChemOrbis Production News Pro, SCG houses 1 million tons/year of ethylene, 500,000 tons/year of propylene, 500,000 tons/year of LLDPE, 500,000 tons/year of HDPE and 400,000 tons/year of PP capacity at the complex.

Operational challenges

The $5.4 billion Long Son Petrochemicals complex has faced production issues since its startup. On-spec production at the complex was achieved in December 2023, with the complex successfully starting operations in January 2024. However, in February, force majeure was declared following an outage, leading to a shutdown of the complex. Production at the complex returned in late August 2024, with commercial operations starting on September 30.

$700 million US ethane project

Additionally, SCG Chemicals will be investing approximately $700 million in upgrades to its Long Son Petrochemicals complex to use U.S.-sourced ethane. This move aims to lower production costs and improve raw material flexibility, with project completion expected by the end of 2027.