TOKYO - Domestic production facilities for ethylene, a basic raw material for various chemical products including plastics, are set to be shut down for the first time in approximately ten years.
Japanese manufacturers are being forced to rationalize their operations due to factors such as the expansion of production in China. Mitsui Chemicals and Idemitsu Kosan have begun deliberations to shut down one of the two ethylene production units they jointly operate at a complex in Chiba Prefecture by the fiscal year 2027. The plan is to reduce production capacity by about 40%, marking the first suspension of domestic facilities by a Japanese manufacturer in about a decade. Ethylene serves as a fundamental raw material for various chemical products, including plastics, and is considered an indicator of the market conditions for petrochemical products. According to the Petrochemical Industry Association, last year's domestic production volume was at its lowest level in approximately 30 years, and the operating rate of domestic facilities has been sluggish for over a year and a half due to the expansion of production in China, among other factors.
Within the industry, Resonac Holdings has also revealed plans to spin off and make independent the ethylene production facilities at its complex in Oita City within two to three years, focusing on semiconductor-related businesses. Furthermore, the Mitsubishi Chemical Group has announced its intention to separate its petrochemical business and consider reorganization with other companies, leading to expectations that the trend towards rationalization of production and business operations will continue to advance.
Source: NHK
