Japan Petrochemical Industry Moving Ahead with Realignment

Tokyo, Jan. 9 (Jiji Press)–Japan’s petrochemical industry is moving ahead with realignment, pressured by the country’s declining population and China’s overproduction. The industry involves complicated supply chains, including production of ethylene, plastics, synthetic rubber, and fabric materials. This has made it difficult to streamline equipment. However, the operational rate for ethylene production facilities in Japan has remained below the boom-or-bust threshold of 90 pct for 40 months in a row since August 2022, according to the Japan Petrochemical Industry Association. In February 2025, Eneos Holdings Inc. began considering halting a unit of its ethylene production equipment at its Kawasaki oil refinery in Kanagawa Prefecture, south of Tokyo. In August that year, Asahi Kasei Corp., Mitsubishi Chemical Corp. and Mitsui Chemicals Inc. formed a limited liability partnership to consolidate their facilities in western Japan. Maruzen Petrochemical Co. and Sumitomo Chemical Co. have decided to team up to consolidate their facilities in Chiba Prefecture, east of Tokyo. Idemitsu Kosan Co. and Mitsui Chemicals have also agreed on a similar move. These moves are expected to reduce the number of domestic ethylene production facilities from the current 12 to eight by around 2030. Mitsui Chemicals, Idemitsu Kosan and Sumitomo Chemical have also announced the integration of their polyolefin operations. “In 2025, the direction of the petrochemical industry became clear,” said Koshiro Kudo, chairman of the industry association and president of Asahi Kasei. Petrochemical makers are also concentrating their management resources on growing sectors, such as semiconductor materials. In January 2025, Resonac Holdings Corp. spun off its petrochemical operations into a new company, Crasus Chemical Inc. Mitsui Chemicals also plans to separate its petrochemical division around 2027. “Companies are becoming increasingly aware of capital efficiency due to market pressure,” said Akira Tsuboi, a senior analyst at Nissay Asset Management Corp. Tsuboi predicted that realignment moves in the industry will accelerate as company spin-offs make it easier to cooperate with other companies. END [Copyright The Jiji Press, Ltd.]