More naphtha crackers may shut down in Japan – analyst

24 July 2012 16:20  [Source: ICIS news]

HOUSTON (ICIS)--More naphtha crackers could shut down in Japan because of an appreciating yen and because of competition from ethane crackers in the US, an analyst said on Tuesday.

"Japanese petrochemical companies are facing very tough structural problems," said Yoshihiro Azuma, an analyst with Jefferies.

Other problems facing the industry in Japan include manufacturers leaving the country, Azuma said. Those companies are leaving because the amount of skilled labour will likely decline and because domestic demand will also continue falling because of a shrinking population.

Already, utilisation rates at Japanese naphtha crackers have been at about 80% for the past seven months, Azuma said.

So far, Mitsubishi Chemical has said it would reduce capacity at its No 1 cracker in Kashima, Azuma said. Shutdowns could occur in the next five years.

Those shutdowns do not bode well for synthetic rubber producers in Japan, Azuma said.

By: Al Greenwood
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