May 31, 2026 (News On Japan) - Shortages of thinners, paints, adhesive tapes and other petroleum-derived products are continuing to spread across Japan, raising questions about whether supply disruptions can still be explained solely by distribution bottlenecks.
Newly released government statistics show that both production and sales of toluene—a key raw material derived from naphtha and used in products ranging from paints and thinners to adhesive tapes—have fallen sharply compared with a year earlier, suggesting that underlying supply constraints may be contributing to the shortages being reported across multiple industries.
Three months after the U.S. attack on Iran, the effects are continuing to ripple across Asia's petrochemical supply chains. At the Asia Petrochemical Industry Conference held in Fukuoka this week, more than 800 manufacturers, traders and industry representatives from 27 countries gathered to discuss market conditions, with developments in the Middle East dominating conversations.
A Malaysian manufacturer producing polyethylene bags said raw material prices have risen between 30% and 50%, making procurement increasingly difficult, particularly for smaller factories.
An Indonesian producer of materials used in adhesives reported that supplies have become harder to secure because of disruptions linked to the Strait of Hormuz, with some raw material prices nearly doubling.
In India, which relies heavily on imported crude oil, concerns are growing as fuel prices continue to rise. An analyst from a British market intelligence company operating in India said the government has had little choice but to increase gasoline and diesel prices, raising concerns about the cost of living.
The effects are also being felt in Japan.
At an automotive repair and paint shop in Toyonaka, Osaka Prefecture, supplies of naphtha-derived products remain unstable. Thinners used for vehicle painting became difficult to obtain earlier this year, though supplies have improved somewhat in recent weeks.
"Products are arriving again, but we never know when supplies might disappear," one employee said.
Engine oil, often described as the lifeblood of a vehicle, was replenished before stocks were exhausted, but concerns are now growing over the availability of body filler compounds used to repair dents and scratches.
Workers at the shop said they were surprised to learn how many everyday products depend on naphtha-derived materials.
Particular concern surrounds masking tape, which is essential during vehicle painting to protect areas that should not be coated. The tape's adhesive contains petroleum-derived materials, and supplies have become increasingly difficult to secure.
The shop currently has roughly two months' worth of inventory after implementing conservation measures. However, inquiries to suppliers revealed that deliveries remain highly limited, with no clear indication of when normal supplies will resume.
As a result, workers have been forced to adopt less efficient methods to reduce tape consumption. For example, vehicle doors are sometimes removed before painting to reduce masking requirements, even though the additional labor lowers productivity.
The company reported that while the number of vehicles handled remained unchanged from the previous month, overall productivity declined by approximately 30%.
"Every time we manage to secure one item, another becomes unavailable," a company representative said. "Trying to predict what will happen next only increases stress because reality keeps changing."
The shortage is also affecting major manufacturers.
Kyowa, known for its long-selling rubber bands and adhesive products, produces a wide range of tapes including cellophane tape, vinyl tape and packaging tape. Adhesive tape accounts for roughly 60% of the company's sales.
To manufacture these products, natural rubber and resins must be dissolved using solvents. One of the most important solvents is toluene.
The company said that in mid-March suppliers informed them that only half of their usual toluene allocation could be delivered.
Executives described the situation as extremely serious and immediately began seeking alternative sources. A shipment of Chinese-made toluene finally arrived on May 20th, marking the first time the company had imported the chemical from China.
The imported material is still undergoing testing to determine whether its quality matches domestic products, a process expected to take several weeks.
The cost impact has been severe.
According to the company, imported toluene costs roughly four times more than it did in February before the Middle East crisis intensified. Even domestically sourced toluene now costs more than double its February price.
Because Kyowa also manufactures medical tapes, government intervention helped ensure that the company ultimately secured volumes comparable to the previous year.
Nevertheless, concerns remain widespread across the industry.
At a recent annual meeting of an adhesive tape industry association, company representatives repeatedly raised concerns about unstable toluene supplies.
Several participants said toluene had been the single most problematic material over the past six weeks because it is essential for dissolving rubber and producing adhesives.
Others noted that while toluene shortages initially attracted attention, procurement difficulties have now spread to numerous other materials throughout the supply chain.
Toluene is also widely used in paints and thinners, where shortages have been reported since April at construction and industrial sites.
The government maintains that Japan as a whole has secured sufficient quantities of naphtha-derived petroleum products. Officials argue that shortages occurring at worksites are primarily the result of distribution bottlenecks, communication failures and excessive ordering by customers.
The Ministry of Economy, Trade and Industry has repeatedly stated that overall supplies remain adequate and that upstream production has recovered since mid-April following refinery maintenance and increased naphtha imports.
However, newly released April statistics tell a more complicated story.
Domestic toluene production fell from approximately 102,800 tons in April last year to around 59,100 tons this April, representing a decline of 43%.
Sales volumes fell even more sharply. Toluene sales totaled just 23,200 tons, a 67% decrease compared with the same month a year earlier.
Even after accounting for increased imports and reduced exports, calculations by the program indicate that domestic supply available for Japanese users fell by roughly 22% year-on-year.
Yusuke Akazawa, editor-in-chief of logistics publication Logistics Today, said the figures represent an important development.
"The government says supplies are sufficient overall, yet businesses are saying products are not reaching them," Akazawa said. "When you examine the supply chain, the reduction becomes visible. It is important to acknowledge that available supply itself has declined."
When asked about the decline in production and sales, METI officials responded that interviews with companies confirmed that toluene used in paints and thinners was still being supplied adequately. Officials added that detailed data could not be disclosed but claimed volumes remained above year-earlier levels.
As shortages and rising prices continue, businesses are searching for alternatives.
Ito-Yokado has begun replacing some plastic packaging materials with paper-based alternatives. Lawson plans to expand the use of paper lids for store coffee cups to 100 outlets during the current fiscal year.
Organic food delivery company Radish Boya is also adapting. The company serves approximately 73,000 members and uses between 200,000 and 300,000 plastic bags each week for produce deliveries.
Since the Golden Week holidays, suppliers have begun restricting orders and raising prices by 20% to 30%.
In response, the company has reduced plastic bag usage by 12% by eliminating packaging for products that can maintain freshness without bags and by switching some items to paper packaging.
The changes come at a cost. Paper packaging is nearly three times more expensive and reduces operational efficiency, but the company says maintaining stable supplies remains the priority.
To avoid passing higher costs on to consumers, Radish Boya is expanding a recycling initiative that has been in place for more than three decades. The company already recovers cardboard boxes and egg cartons, achieving a reuse rate of roughly 70%.
Beginning next month, it will also collect and reuse fruit protection nets used for peaches and other produce. The items, which are also derived from naphtha-based materials, will be returned to farmers for reuse.
Company officials say the shortages have highlighted the need to rethink existing business practices and build more resilient supply chains.
The report's producers noted that working inside an adhesive tape factory made the importance of toluene impossible to ignore. The strong odor of the highly volatile solvent filled the air, underscoring both its industrial importance and the challenges involved in handling and storing it safely.
Industry participants at the Fukuoka conference also remarked that the atmosphere differed markedly from previous years. Attendance from Middle Eastern companies was noticeably lower, and discussions that would normally focus on networking were instead dominated by concerns over supply disruptions and geopolitical risks.
Many attendees also pointed to the unpredictability of policy signals from the Trump administration, saying frequent shifts in messaging have added another layer of uncertainty to global markets.
The naphtha-based supply chain extends across the Middle East, Asia and Japan, and depends on the smooth movement of goods across international markets. The disruptions seen this year have highlighted how vulnerable that system can become when geopolitical tensions escalate.
Source: TBS
