Japan's petrochemical industry to increase competitiveness

In the face of adversity and imbalanced supply and demand structure in the market, the Japanese petrochemical industry is taking active actions to adjust its business and product structure in order to increase its economic efficiency.

Ethylene cracking:

Integration to increase functional products

In 2009, Japan’s domestic ethylene production was 6.91 million tons, a slight increase from the previous year but still less than 7 million tons for the second consecutive year. In the first half of 2010, the operating rate of petrochemical plants in Japan continued to remain high. Ethylene production reached 3.35 million tons, a year-on-year increase of 6%, which was also the highest level in the past three years. However, in the second half of the year, new large-scale projects were implemented in the Middle East including Saudi Arabia. The petrochemical plant was put into operation on schedule, and a large number of Middle Eastern petrochemical products influx into the Asian market affected the production of ethylene in Japan.

In the medium term, Japan's petrochemical industry may return to its predicament. In order to build a stable profit structure, it is imperative that the Japanese petrochemical industry adopt a strategy to optimize the structure and increase differentiated functional products.

Mitsui Chemicals Co., Ltd. and Idemitsu Kosan Co., Ltd. carried out limited cooperation in April last year, integrating their production capacity of 1 million tons of ethylene per year in Chiba Prefecture. Their next phase of action will involve refinement of the refining business. Mitsubishi Chemical and Asahi Glass will also integrate their water island crackers and begin processing basic chemicals business on April 1, 2011.

In addition to integrating the ethylene cracking business, Japan Petrochemical Company also decided not to produce general-purpose products and turned to the production of specialty ethylene derivatives such as electronic materials. General petrochemical products have become more competitive in the international market. This is the main reason why Japanese petrochemical companies have abandoned generic petrochemical products. Mitsubishi Chemical is shutting down its uncompetitive polypropylene production plant and gradually withdraws from its styrenic and PVC related business; Mitsui Chemicals shuts down its ethylene glycol production line at its factory in Shirahara City and builds a new 1-hexene The production line, because ethylene glycol has become a general-purpose petrochemical product, the economic added value is far less than 1-hexene; Showa Denko is also re-adjusting its business.

Styrene/polystyrene:

More attention to the global market

In 2010, the styrene/polystyrene business became more competitive in the global market. As the price gap between the Japanese domestic market and the international market continues to expand, the number of imported polystyrene substitutes for domestic production in Japan continues to climb. It is estimated that in 2010 Japan's domestic sales of polystyrene may be lower than 700,000 tons, and producers need to turn to the international market for sales.

According to statistics from the Japan Styrene Industry Association, the production volume of polystyrene in Japan in the first half of 2010 reached 358,000 tons, which is the second lowest level since 2009 after Japan's polystyrene fell to its lowest point. Due to the conventional shutdown and overhaul, the production of styrene monomer in Japan shrank to 1.395 million tons, but the demand for styrene in various application fields increased. In particular, there was a large increase in the demand for ABS copolymers and synthetic rubber. However, sales of high-impact polystyrene in the packaging and general-purpose fields have fallen sharply because of the substitution of imported generic materials by Japanese downstream manufacturers. Last year, Japan's imports of general-purpose polystyrene doubled from 20,000 to 30,000 tons the previous year to 40,000 to 50,000 tons. In the face of the impact of imports, Japanese polystyrene producers have taken the international market as their main target.

At present, there are only six styrene monomer manufacturers and three polystyrene manufacturers in Japan.

Aromatic hydrocarbons:

Reduced crude oil processing threatens product supply

Japan's Aromatic Industry Association stated that sales of benzene, toluene and xylene in the country were basically the same as in 2009 and remained at around 10.17 million tons. Among them, benzene sales were lower than in 2009, mainly due to the decrease in demand for styrene monomer production, which was partially offset by the strong recovery in toluene demand and the growth in xylene demand.

A key factor affecting the Asian aromatics market is whether the growth in demand in the Chinese market will exceed the growth rate of aromatics production in China and the Middle East. According to the forecast of the global demand for aromatics by the Ministry of Economy, Trade and Industry of Japan, by 2014, the demand and supply of the world aromatics market will remain balanced. If it cannot maintain its balance, Japan Petrochemical Corporation will face severe market challenges.

However, an analysis of the Refining and Set Research Association predicts that there will be a shortage of toluene and xylene in the 2013 fiscal year. This conclusion is based on the declining demand for oil products and the production of large-scale offshore petrochemical plants. . The supply shortage of toluene can be controlled and adjusted by adjusting the import and export volume.

JX Nippon Oil & Energy Company has made it clear that it will expand its overseas paraxylene business as a growth strategy and decided to do everything possible to ensure the raw materials required for its 2.6 million tons/year paraxylene production plant.

PVC:

Demand shrinks and triggers industry adjustment

Polyvinyl chloride demand is closely related to the development of infrastructure including water treatment and wastewater treatment. In 2009, sales of PVC in Japan fell from more than 2 million tons during the peak period to 1 million tons, but exports to China and Southeast Asia increased by 28% year-on-year to 700,000 tons. In 2010, Japan's PVC exports continued to improve and it is expected to reach 1.05 million tons in the year. However, it is also pessimistically expected that due to various negative factors, Japan's PVC exports will be more difficult, and exports in 2010 are likely to be less than 1 million tons.

Among the various unfavorable factors, the increase in the exchange rate of the Japanese yen is of the greatest concern. The strengthening of the yen will turn the export of polyvinyl chloride into profits. Overseas PVC producers may use the opportunity of appreciation of the yen to increase their exports to Japan, and if the yen continues to appreciate, downstream users may shift production operations to other countries, and demand for PVC in Japan will further shrink. .

V-tech Co., Ltd. has announced that it will withdraw its ethylene chain business before March 2011. V-Tech Co., Ltd. is a joint venture between Mitsubishi Chemical and Tosoh Corporation. V-Tech Corporation will resell its 120,000-ton/year PVC plant in Kawasaki to Tosoh Corporation. People in the industry believe that this is not enough to ease the gap between the supply and demand in the Japanese PVC market, and the industrial structure adjustment of PVC is inevitable.