Japan’s Mitsui, Mitsubishi eye supply tie-up on phenol-related products

SINGAPORE (ICIS)–Mitsui Chemicals and Mitsubishi Chemical are studying a potential tie-up on supplying phenol-related products in response to poor domestic demand and oversupply conditions, the Japanese firms said on Friday.

These products include phenol, acetone, α-methylstyrene, bisphenol A (BPA) and methyl isobutyl ketone (MIBK), they said in a joint statement.

The two companies “will jointly consider approaches for maintaining product supply during regular major maintenance or facility issues, as well as for the efficient operation of both companies’ tanks”.

The launch of multiple new production facilities across Asia – particularly in China – since 2022 has resulted in a significant oversupply of these products.

This oversupply, coupled with weak domestic demand, has caused a market slump.

Mitsui Chemicals in April last year said that it will close its 190,000 tonnes/year phenol plant at the company’s production site in Ichihara by fiscal year 2026 (year to March 2027) due to declining profitability.

Mitsui Chemicals currently produces phenol at three locations: Ichihara in Chiba, Takaishi in Osaka and Shanghai in China.

“Going forward, the company [Mitsui Chemicals] intends to maintain stable product supply by creating a highly capital-efficient, reliably profitable phenol chain centered around the 200,000-ton capacity phenol plant at its Osaka Works,” the joint statement noted.

Mitsubishi Chemical, which operates a 280,000 tonne/year phenol plant at its Ibaraki Plant and produces derivatives like BPA, is also taking steps to improve its competitiveness.

These steps include the closure in March 2024 of its 120,000 tonne/year BPA plant in Kurosaki, Fukuoka.

Mitsubishi Chemical has another 100,000 tonne/year BPA plant in Kashima that will continue operating.