Covestro plans consolidation of Antwerp PC production, winding up BPA output

Covestro is proposing to consolidate polycarbonate production at its Antwerp site in Belgium from four operational lines to one and discontinue the production of PC feedstock bisphenol-A, the company said in a statement Oct. 15.

The facility currently has a PC nameplate capacity of 240,000 metric tons/year, a spokesperson for the company told Platts, part of S&P Global Energy, by email, although he declined to disclose how much capacity would remain following the proposed restructuring or the production capacity of its BPA unit.

All four of the PC production lines and the BPA unit are currently operational, the spokesperson said. S&P Global Energy CERA estimates Covestro's BPA capacity at Antwerp at about 245,000 mt/year.

Covestro has launched a formal information and consultation process with employee representatives, with no final decision to be taken until the process is completed.

"The information and consultation process in accordance with Belgian law has started today," said the spokesperson. "The process will run as long as is needed to find a solution together."

PC is used mainly in construction, automotive parts, medical devices and electrical components.

Covestro's announcement comes amid subdued European demand and ample supply in both the PC and upstream BPA markets. Buyers have largely adopted a hand-to-mouth purchasing approach, while potential growth from data centers and robotics has not offset weakness in traditional end-use sectors.

Lower-priced Asian imports continue to pressure European producers, and planned operating cuts have yet to significantly tighten availability. Platts assessed DDP NWE BPA at €1,770/mt on Oct. 13, while PC extrusion grade was assessed at €2,000/mt and GP molding grade at €2,300/mt on Oct. 14.

Shift to specialty PC

The proposed consolidation reflected a broader strategic move away from commodity PC production in Europe, where global overcapacity has made production structurally unprofitable, Covestro's spokesperson said.

The remaining PC line would focus on higher-value specialty grades, including heat-resistant APEC, as the company shifts away from standard commodity production in Europe. Covestro said it intended to continue supplying the European specialty PC market through the remaining Antwerp line and its global production network.

For customers purchasing standard and commodity PC grades, the spokesperson said the company would proactively discuss individual circumstances and possible solutions if the restructuring proposal was confirmed.

With local BPA production potentially discontinued, Covestro's spokesperson said the company could source the feedstock required for the remaining Antwerp PC line from its global production network or external suppliers if necessary.

"We have the option of sourcing the required BPA from our global production network and – if necessary – from external sources," the spokesperson said.

Specific sourcing arrangements would be discussed and developed during the consultation process, he added.

Global overcapacity

The proposed changes were driven by mounting structural pressures on Europe's chemical industry, including high energy and production costs, subdued demand and growing international competition, Covestro said.

Significant capacity additions, particularly in Asia, have contributed to persistent global overcapacity in standard PC grades, putting pressure on operating rates and profitability.

According to Covestro, capacity utilization has declined significantly and is expected to remain low for the foreseeable future. The spokesperson said global PC capacity has expanded by around 30% since 2021, with further additions planned.

 "As such, we don't expect a meaningful market recovery for standard polycarbonates in the foreseeable future," the spokesperson said.

The company's Antwerp operations have been increasingly loss-making since 2022, making the current production setup economically unsustainable, the company said.

"Europe's chemical industry is at a crossroads. The structural challenges are severe, and market realities have changed fundamentally," Covestro CEO Markus Steilemann said in the company statement.

"We need to adapt our portfolio to where we can compete successfully in the long term to ensure a future for our production in Europe," he added.

The proposed restructuring forms part of Covestro's broader strategy to strengthen its global competitiveness and profitability by focusing on higher-value materials and technologies.

Despite the planned reduction in PC production, Covestro said Antwerp would remain an important part of its European manufacturing and innovation network.

The company's previously announced investment in a new aniline production unit at the site would proceed as planned, reinforcing Antwerp's position as a European production hub for the industrial chemical.

The site's polyether production lines and Technology Centre, which supports global process technology development for polycarbonates, would also remain unaffected.

"Commodity production in Europe is increasingly difficult to operate competitively, while we continue to see attractive opportunities in high-value specialty materials," Covestro Chief Technology Officer Thorsten Dreier said.