More than 200 jobs are at risk after Mitsubishi Chemical UK announced plans to end production on Teesside. It had begun a consultation with workers at its plant in Billingham.
It added "rapidly escalating" gas prices, a downturn in the European economy caused by inflation and weaker demand meant UK manufacturing was no longer viable. A final decision is expected to be made in January.
The firm said production of methacrylates, which are used in acrylic products and require large quantities of gas, initially stopped in January as part of a planned overhaul and had remained halted since September because of worsening economic factors.
In a statement, it said it had explored options included a temporary mothballing of the site but had concluded it was not viable. Malcolm Kidd, vice-president of the firm's methacrylates business, described it as a "very sad day for everyone associated with our business on Teesside".