Rayong Olefins Cracker Shutdown Extends into Fifth Month Amid Hormuz Feedstock Crisis

Rayong Olefins, a petrochemical subsidiary of Thailand's Siam Cement Group (SCG), has kept its naphtha cracker at the Map Ta Phut industrial complex offline since early March 2026, and the stoppage has now stretched into its fifth month. The plant remains under a force majeure declaration first issued on March 6, 2026, and the company has not confirmed a firm restart date as of late July.

The root cause of the shutdown lies far from Thailand, in the Strait of Hormuz. Escalating conflict in the Middle East disrupted shipping through the strait, a vital corridor for oil and natural gas cargoes. That disruption cut off reliable deliveries of naphtha and propane, the two main feedstocks the cracker needs to make ethylene and propylene. With several shipments unable to reach Thailand as scheduled, SCG concluded it could no longer run the unit and moved to suspend operations.

The affected cracker is a large one. It can produce up to 800,000 tonnes of ethylene and 400,000 tonnes of propylene per year. Those olefins normally feed a cluster of downstream operations, including Siam Polyethylene, Thai Plastics and Chemicals, Thai Polyethylene and HMC Polymers. The knock-on effect on these plants is a central reason the incident matters beyond a single site.

When SCG first declared force majeure, it framed the halt as temporary and stressed that its other chemical plants and business units were still running normally. The group also pointed to its financial strength, noting total adjusted earnings before interest, taxes, depreciation and amortisation of about 55 billion baht in 2025, and said it held enough cash to weather a prolonged disruption.

SCG estimated at the outset that the idled plant would carry fixed cash costs of roughly 150 million baht per month. With the shutdown now running close to five months, the cumulative burden has climbed to an estimated 690 million baht, which works out to around 20.5 million US dollars at late-July exchange rates. That figure reflects standby costs alone and does not capture lost sales or the wider margin damage across the downstream chain.

The Rayong stoppage was never an isolated event. It formed part of a broad wave of force majeure declarations and run cuts that swept across Asian petrochemical producers in March 2026. In Singapore, Petrochemical Corporation of Singapore declared force majeure on March 5. Formosa Petrochemical in Taiwan later shut a major cracker for lack of naphtha. Producers in China were reported to be trimming operating rates by as much as 20 percent. The clustering of these outages pushed Asian olefins prices sharply higher through the spring.

Some peers have since recovered. Taiwan's Formosa Petrochemical lifted its force majeure on June 3, 2026, after nearly three months, having secured alternative feedstock and rebuilt supply chain flexibility. Rayong Olefins, by contrast, has stayed shut. That divergence suggests SCG has faced tougher or more persistent feedstock constraints, or has chosen to keep the unit down while regional olefins margins remain weak.

To limit the damage, SCG has leaned on cost discipline, inventory management and efforts to source feedstock outside the Gulf region. Its newer Long Son Petrochemicals complex in Vietnam, for example, relies heavily on propane shipped from the United States rather than the Middle East, a sourcing pattern that offers a template for reducing exposure to Hormuz.

As of July 24, 2026, the situation remains active. The force majeure has not been withdrawn, no restart timeline has been confirmed, and the outcome still hinges on how quickly Gulf shipping conditions and feedstock flows return to normal. For customers and downstream producers, the prolonged loss of a major regional olefins source continues to tighten supply and add uncertainty to procurement planning across Southeast Asia.