Mitsubishi Gas Chemical Set to Cease OX, PA Production in 2025 as Demand Declines

Japan's Mitsubishi Gas Chemical (MGC) has unveiled its strategy to close down its orthoxylene (OX) and phthalic anhydride (PA) production facilities situated at the Mizushima site by mid-January 2025. This move comes in response to a notable decline in demand and dim prospects for profitability. The decision to halt operations at the OX extraction plant, operational for over half a century and boasting an annual capacity of 30,000 tons, and the 40,000-ton-per-year PA unit, underscores the prevailing tough market conditions confronting the chemical sector.

MGC's initiative to cease the production of OX and PA reflects the shifting dynamics within the marketplace and the intensifying competition faced by industry players. OX, primarily employed as a raw material in the synthesis of PA, solvents, as well as diverse pharmaceutical and agricultural intermediates, has witnessed a notable downturn in demand. Similarly, PA, which plays a pivotal role as a plasticizer enhancing the flexibility of vinyl chloride resin, is grappling with decreased demand. The company's evaluation of the unpromising profit outlook for these commodities has prompted the strategic choice to discontinue their production.

The discontinuation of OX and PA production by MGC is poised to reverberate across the global chemical landscape. As supply chains undergo recalibration in the wake of these closures, industry stakeholders will confront the intricate task of addressing the challenges associated with sourcing these crucial raw materials. Moreover, this development has the potential to instigate a ripple effect, exerting an influence on the prices and availability of associated chemical products and intermediates.

As MGC gears up to wind down its OX and PA operations, attention shifts to the strategies adopted by the chemical industry to adapt to the evolving terrain. Stakeholders are likely to explore alternative avenues and innovative solutions to meet their raw material requirements. MGC's decision underscores the imperative of agility and responsiveness for chemical manufacturers grappling with fluctuating demand and market pressures.

This strategic pivot by Mitsubishi Gas Chemical serves as a poignant reminder of the dynamic nature of the global chemical sector. As entities like MGC reassess their product portfolios and operational paradigms, the industry as a whole must remain vigilant, adaptable, and forward-thinking to navigate challenges effectively and seize emergent opportunities.

Mitsubishi Gas Chemical Company, Inc. originates from Japan, with its inception dating back to 1918, and its official incorporation occurring in 1951. Operating across five distinct business segments, the company specializes in the production of various chemical products. These segments encompass natural gas-related chemicals, aromatic-related chemicals, functional chemicals, specialty functional materials, and a real estate arm.