In the annual meeting of Asia Petrochemical Industry Conference which was held on 15th and 16th May, 2014 in Pattaya, Thailand had released the report to all the participants. On 15th May, 2014 Japan Petrochemical Industry Association (JPCA) said that in the year 2014 the growth of petrochemical demand of Japan is projected to slowly but surely rise in the country, on account of the depreciation of the Japanese yen and enduring steady growth of the US and the Chinese economies.
Moreover, in the petrochemical industry of Japan quiet a number of turnaround will be taking place this year mainly in the Northeast Asia (NEA) and due to these turnarounds, firm olefin demand and reduced output will facilitate Naphtha crackers to uphold lofty operating rates and at the same time price of olefin will settle at a comfortable level.
Furthermore in the global petrochemical market, Japanese petrochemical industry have been forced to strengthen its competitiveness due to increasing reliance on shale gas in North America and constructing new large scale petrochemical facilities in the Middle East and China. For this reason, the Japanese petrochemical industry especially in Asia needs to put into practice rationalisation as much as possible under the given conditions plus to seek growth markets.
According to Japan Petrochemical Industry Association (JPCA), few major Japanese petrochemical industries have listed some of the future plans which have decided to shutdown Naphtha crackers and also the industry should be restructured and involve optimization of domestic crackers. In the next two years, Japanese major Petrochemical manufactures Sumitomo Chemical, Mitsubishi Chemical and Asahi Kasei are likely to shut its Naphtha cracker plant permanently.
Japanese major Petrochemical manufactures Sumitomo and Asahi Kasei are likely to shut its cracker plant permanently in next two years. One of the major Japanese chemical producers Sumitomo Chemical has schedule to permanently shut its cracker plant in the month of May 2015. The plant is located in Chiba near Tokyo and has a production capacity of 415,000 tons/year. Furthermore, another major petrochemical producer Asahi Kasei has also planned to close down its cracker plant in the month of April 2016 having production capacity of 504,000 tons/year.
On the other hand, subsequent to the Japanese companies decision to cancel plans for a proposed Linear Alpha Olefins (LAO) unit at the US Gulf Coast, a joint venture with Japanese firms Mitsui & Co. Ltd and Idemitsu Kosan had terminated a long term ethylene off-take agreement by US based Dow Chemical. In spite of this termination of the agreement, the strategic growth investment of Dow Chemical in the region upholds to progress with several high-return, alternative uses for the ethylene which was included in the cancelled arrangement currently under evaluation.
According to separate releases from Dow Chemical and Mitsui on 18th March, 2013, Japanese manufacturers Idemitsu Kosan and Mitsui first announced their proposed 50-50 joint venture as well as the ethylene off-take agreement with Dow Chemical in the month of March 2013. During this time the petrochemical major Mitsui had said that the LAO project was driven by the US shale production revolution, which the Japanese firms believed would secure access to cost-advantaged Ethylene feedstocks.
According to the industry experts, the joint venture had entered the front-end engineering and design phase for the project and in the year 2014 they expected a final investment decision, whereas for the proposed 330,000 mt/year LAO unit no precise location along the US Gulf Coast had been selected. However, if the cancelled project had been approved by now then the construction and start-up of the new unit was targeted for the year 2016.
According to the government data that was shown on 19th May, 2014, the Japanese Naphtha import in the month of April, 2014 for the petrochemical sector was down by 7% in compare to the same month of 2013. As per the Ministry of Economy, Trade and Industry, last month in April, the Naphtha imports for Ethylene production was totaled to 0.99 million tonnes which was noted down by 1.07 million in compare to the same month of 2013.
Besides this the Japan Petrochemical Industry Association (JPCA) had suggested that the petrochemical industry of Japan should more focus on value added products through an affiliation with downstream industries like health care, electronics, automotive, as well as to promote ecological friendly technologies.
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