News On Japan

Is Japan Really Running Short of Naphtha?

TOKYO - The impact of Japan’s growing naphtha shortage is spreading across a widening range of industries, raising concerns about manufacturing, logistics, and even daily consumer life.

Naphtha, a colorless liquid produced during the refining of crude oil, is often referred to as a “magic liquid” because of the vast range of products it helps create, from plastics and paints to synthetic fibers and rubber, meaning any supply shortage has the potential to spread across a wide range of industries and everyday goods, including food trays and packaging materials.

As supply pressures intensify, companies are beginning to adopt emergency conservation measures. Calbee announced that packaging for products including potato chips will gradually shift to black-and-white designs from June 25th, affecting 14 items, in an effort to reduce petroleum-derived materials used in printing and packaging.

Nisshin Seifun Welna is also reducing the use of tape on pasta products, while local governments have begun taking similar steps. Osaka’s Izumiotsu Mayor Hiroyasu Harada said on X that some municipal garbage bags will switch from green to black beginning this autumn.

Color printing requires multiple stages in which white is first applied before additional colors are layered individually, while black-and-white printing reduces production steps and lowers solvent consumption, helping conserve petroleum-based materials.

Despite these developments, the government continues to insist supplies remain stable. Chief Cabinet Secretary Sato said Japan has secured sufficient quantities of printing ink materials and naphtha nationwide, while Prime Minister Koichi indicated there are currently no plans for a third release from the nation’s petroleum reserves this month.

Japan has already conducted two releases from its oil stockpiles, leaving reserves estimated to support the country for approximately 206 days. With the Strait of Hormuz effectively blocked, Japan has increasingly turned to alternative suppliers outside the Middle East, with replacement procurement expected to cover roughly 60% of needs in May and 70% in June.

Businesses, however, say the situation on the ground tells a different story.

Construction industry groups warn that shortages and delays in building materials are making project suspensions and postponements unavoidable, while a printing company in Kochi Prefecture reportedly said it has no clear outlook for solvent supplies next month and has halted new orders entirely.

Teikoku Databank estimates that naphtha shortages could create procurement risks for 46,741 manufacturing firms nationwide.

Surveys conducted among small and midsize manufacturers in Kyoto in late April found that around 80% of business owners were already experiencing disruptions in securing raw materials, with many saying materials were simply no longer available.

Industry data also points to worsening conditions, with factory operating rates tied to ethylene production falling nearly 10% compared with February and March levels. Government statistics showed March chemical industry production dropped 8.6% from the previous month and 15.1% year-on-year, indicating that output itself is already declining.

The government’s insistence that supplies remain sufficient appears aimed at avoiding panic and preserving consumer confidence, as authorities attempt to maintain economic activity for as long as possible.

At the same time, calls are growing for gradual conservation measures before the situation worsens further. Some overseas governments have already begun taking stricter steps, with India reportedly discouraging overseas travel and gold hoarding in response to growing uncertainty.

The shortages are also expected to affect air conditioner installations ahead of summer, since plastics derived from naphtha are widely used in appliances and components. Industry estimates suggest installation wait times could stretch from the usual two to three weeks to as long as one month this year.

Contractors are also warning of rising costs, with some air conditioning businesses saying they may need to increase installation fees by 7,000 yen to 8,000 yen due to soaring component prices.

The issue is emerging alongside Japan’s so-called “2027 problem,” under which stricter energy efficiency standards for household air conditioners will take effect from April next year as part of decarbonization efforts. Manufacturers including Mitsubishi Electric are already shifting more products to meet the new standards, while retailers estimate average air conditioner prices could rise by 150,000 yen to 200,000 yen depending on the model.

Further inflation may become unavoidable as mounting raw material costs continue to pressure smaller businesses. Large corporations may be able to absorb part of the burden through volume sales, but smaller firms and independent operators face far greater difficulty passing rising costs onto consumers.

Many small businesses could soon be forced into simultaneous price hikes, while others unable to absorb the costs may face severe financial strain or closure, raising concerns that the effects of the naphtha shortage are beginning to extend beyond inconvenience and into broader risks for daily life and the wider economy.

Source: ABCTVnews

News On Japan
POPULAR NEWS

Japan began applying a new numerical alcohol threshold for dangerous driving offenses on July 21, introducing a clearer standard for cases involving impaired driving that could lead to fatal accidents.

Prime Minister Sanae Takaichi's government approved its first annual basic economic and fiscal policy on Tuesday, pledging "responsible and proactive fiscal policy" and envisioning about 370 trillion yen in public- and private-sector investment in strategic industries through fiscal 2040.

Breathtaking 4K footage filmed from a helicopter offers a sweeping aerial view of Mount Fuji and its majestic surrounding landscape.

A covert network of shuttle tankers is carrying crude through the increasingly dangerous Strait of Hormuz as renewed fighting between the United States and Iran disrupts shipping and raises concerns over how Japan will secure the oil it needs.

Russian Deputy Foreign Minister Andrey Rudenko has criticized moves by Japanese and Ukrainian companies to cooperate on drone technology, warning that such ties would be regarded by Moscow as a "clear hostile act."

MEDIA CHANNELS
         

MORE Business NEWS

Tokyo stocks rebounded sharply on July 21 as investors bought back semiconductor and artificial intelligence-related shares after last week’s steep selloff, while attention shifted to upcoming U.S. technology earnings and the government’s new economic policy roadmap.

Japanese cash equities were closed for Marine Day on July 20, leaving investors to assess whether Tokyo can stabilize after last week’s technology-led rout as oil prices rose above $90 a barrel, the yen remained near four-decade lows and global markets braced for another test of the artificial intelligence trade.

Apple has raised prices for iPhones sold in Japan, with the top-end iPhone 17 Pro Max now costing more than 210,000 yen, as the prolonged weakness of the yen increases the local cost of products priced and managed in US dollars.

A tanker carrying about 1 million barrels of Mexican crude oil arrived off Yokkaichi, Mie Prefecture, on the morning of July 17, marking Japan's first such delivery since the Strait of Hormuz was effectively closed.

Tokyo stocks plunged on July 17 as a global selloff in semiconductor and artificial intelligence-related shares pushed the Nikkei 225 into correction territory, while Middle East tensions, higher oil prices and persistent yen weakness added to pressure on investors.

Nissan Motor unveiled a fully redesigned Elgrand minivan on July 17, marking the model's first complete overhaul in 16 years, while introducing a new brand message as the automaker seeks to rebuild its business and revive sales.

Seven & i Holdings is considering investing several hundred billion yen in Zabka Group, Poland's largest convenience store operator, as the Japanese retailer seeks to expand its presence in Europe.

Japanese manufacturers including Fanuc, Yaskawa Electric, Fujitsu, Hitachi, Kawasaki Heavy Industries and Komatsu announced new artificial intelligence initiatives on July 16 as Nvidia expanded its partnerships with Japan's robotics and industrial sectors.