U.S. supermajor ExxonMobil plans to permanently shut down one of two steam crackers at its Singaporean refining and petrochemical complex, a move driven by global overcapacity and threatened profitability in the industry.

The petrochemicals industry has been grappling with razor-thin margins and losses for months, due to the global overcapacity mostly coming from the huge overbuild in China.

The petrochemical overcapacity in China has affected Asian markets and South Korea has also urged its struggling petrochemicals sector to slash excess capacity and restructure operations amid a global glut that has depressed petrochemicals margins and threatened the industry in many Asian and European countries.