Ineos to mothball three Hull chemical sites as UK gas prices bite

Ineos is pausing production at three chemical sites in Hull, in a move the company says is being driven by high UK gas prices. The decision affects plants that make industrial inputs used across pharmaceuticals, clothing, cosmetics, detergents, construction materials and military explosives. The company said two plants are already shut and a third will stop production in the coming days.

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The firm said up to 4,000 jobs are affected, including about 1,000 direct roles and 3,000 in the supply chain. Sir Jim Ratcliffe, who leads the industrial group, said the company was being forced to mothball some of what it described as among the most efficient plants in Europe. He said UK gas prices are 12 times higher than in the United States and eight times higher than in China, where competitors use coal-based processes.

The Hull sites produce acetic acid, acetic anhydride and ethyl acetate. Acetic acid is used in vinegar, paint and glue, while acetic anhydride is a key ingredient of aspirin and ethyl acetate is used in solvents and in decaffeinating tea and coffee. The company said gas is used as an ingredient in its production process, making energy costs central to the plants' competitiveness.

It also said the facilities have a lower carbon footprint than rival plants in the US and China. The announcement matters because it highlights pressure on energy-intensive manufacturing in the UK at a time when wholesale natural gas prices have almost doubled since July. The company said the current price environment makes it difficult to compete with producers in the US and China.

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It is also seeking tariff protections from the UK and the European Union, where most of its products are exported, arguing that Chinese imports need a stronger trade response. Ineos is also trying to secure liquefied natural gas directly from the US at lower prices, although the company said that could take up to a year. Workers across the sites will be kept on while the company waits for that option or for gas prices to fall.

The move adds to wider concerns about the future of heavy industry in Britain, particularly where production depends on gas as both a fuel and a feedstock. What remains unclear is when the plants might restart and what conditions would allow that to happen. The company has not given a timetable beyond saying the shutdowns are temporary while it seeks cheaper supply.

The next developments to watch are whether lower-cost LNG can be secured, whether governments respond to the call for tariff protections, and whether gas prices ease enough to make production viable again.

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