Japan Chemical Trading Blog

The latest chemical trading industry insights from Japan, Asia and the world, reported by the President of Daishin Corporation, Masa Oguchi.

Chile Earthquake and Iodine

On April 24, 2014, the Chemical Daily reported that the main iodine export port had been seriously damaged by the large-scale earthquake in Chile on April 1, and the iodine market price may increase.

Iodine is an element indispensable to mankind; it is used for X-ray contrast media, polarizing plates for liquid crystal displays, medicines, salt additives, etc.

As Chile is the world’s largest iodine producer, and Japan is the second largest, inquiries to Japanese manufacturers are said to have increased.

However, so far, there have been no reports that iodine manufacturing facilities in Chile suffered damage due to the earthquake, and it is not certain whether the earthquake is causing a full-fledged price increase; this will only be known when we learn more details on the situation.

Although the iodine price soared due to a tight supply-demand balance when Japanese manufacturers stopped production for about one month just after the Great East Japan Earthquake in 2011, the market is in a downtrend worldwide recently.

Chile Earthquake and Iodine

On April 24, 2014, the Chemical Daily reported that the main iodine export port had been seriously damaged by the large-scale earthquake in Chile on April 1, and the iodine market price may increase.

Iodine is an element indispensable to mankind; it is used for X-ray contrast media, polarizing plates for liquid crystal displays, medicines, salt additives, etc.

As Chile is the world’s largest iodine producer, and Japan is the second largest, inquiries to Japanese manufacturers are said to have increased.

However, so far, there have been no reports that iodine manufacturing facilities in Chile suffered damage due to the earthquake, and it is not certain whether the earthquake is causing a full-fledged price increase; this will only be known when we learn more details on the situation.

Although the iodine price soared due to a tight supply-demand balance when Japanese manufacturers stopped production for about one month just after the Great East Japan Earthquake in 2011, the market is in a downtrend worldwide recently.

Polystyrene

According to an article of the Nikkei Newspaper dated on April 25, “price of polystyrene resin used as raw material of food containers or construction components has increased approx. 12 yen (5%) to 241 – 251 yen per kg (approx. USD2.35 – 2.45 per kg.) in Japan from the beginning of the year”.

International price of the raw material, styrene monomer, is stable. However, it becomes easier for domestic manufacturers to permeate price increase to customers as the import is losing competitive power in Japan with the background of the yen’s depreciation.
There are three manufacturers in Japan: DIC, Toyo Styrene and PS Japan.

It seems the raw material price and the exchange rate hold the key of future price trends.

Polystyrene

According to an article of the Nikkei Newspaper dated on April 25, “price of polystyrene resin used as raw material of food containers or construction components has increased approx. 12 yen (5%) to 241 – 251 yen per kg (approx. USD2.35 – 2.45 per kg.) in Japan from the beginning of the year”.

International price of the raw material, styrene monomer, is stable. However, it becomes easier for domestic manufacturers to permeate price increase to customers as the import is losing competitive power in Japan with the background of the yen’s depreciation.
There are three manufacturers in Japan: DIC, Toyo Styrene and PS Japan.

It seems the raw material price and the exchange rate hold the key of future price trends.

Indium

According to an article of Japan Metal Bulletin dated on April 15, “domestic price of low grade indium for alloy is ranging 76,000 – 81,000 yen per kg (approx. USD740 – 790 per kg.), the same as the previous week”.

Indium is a soft silver-white metal to be used for transparent conductive films for touch panels after processed into indium tin oxide (ITO), lead-free solder material, semiconductor element material, etc.

It is created as a byproduct of zinc and China is the biggest producing country. One of the dominant markets is Japan. However, its domestic demand has declined lately.

Fanya Metal Exchange in Yunnan Province, China, which is rumored to have some relationship with the Chinese Government, is said to have an inventory well over the annual demand of the world, and according to traders, domestic prices in China have been increasing again to such a price exceeding 4,500 Yuan per kg. (approx. USD720 per kg.).

Future moves of Fanya Metal Exchange, which is holding a large quantity in inventory, are attracting attention.

Indium

According to an article of Japan Metal Bulletin dated on April 15, “domestic price of low grade indium for alloy is ranging 76,000 – 81,000 yen per kg (approx. USD740 – 790 per kg.), the same as the previous week”.

Indium is a soft silver-white metal to be used for transparent conductive films for touch panels after processed into indium tin oxide (ITO), lead-free solder material, semiconductor element material, etc.

It is created as a byproduct of zinc and China is the biggest producing country. One of the dominant markets is Japan. However, its domestic demand has declined lately.

Fanya Metal Exchange in Yunnan Province, China, which is rumored to have some relationship with the Chinese Government, is said to have an inventory well over the annual demand of the world, and according to traders, domestic prices in China have been increasing again to such a price exceeding 4,500 Yuan per kg. (approx. USD720 per kg.).

Future moves of Fanya Metal Exchange, which is holding a large quantity in inventory, are attracting attention.

Shin-Etsu New Factory in Vietnam

On April 21, Shin-Etsu Chemical Co., Ltd. announced that “they were going to establish a new rare-earth magnet factory with a production capacity of 2,000 ton in Vietnam investing approx. 12 billion yen”.

This company has filed a construction license for an ethylene factory in the U.S. just last week.

Both decisions seem just like Shin-Etsu’s who has been recognized by its foresight and drastic leverage.

Although their business field is different from ours, it is a company that can be a great model that other businesses’ managements should learn from.

Shin-Etsu New Factory in Vietnam

On April 21, Shin-Etsu Chemical Co., Ltd. announced that “they were going to establish a new rare-earth magnet factory with a production capacity of 2,000 ton in Vietnam investing approx. 12 billion yen”.

This company has filed a construction license for an ethylene factory in the U.S. just last week.

Both decisions seem just like Shin-Etsu’s who has been recognized by its foresight and drastic leverage.

Although their business field is different from ours, it is a company that can be a great model that other businesses’ managements should learn from.

Sumitomo Chemical

A Nikkei Newspaper article dated April 17th says, “Sumitomo Chemical Co., Ltd. is expected to report a 210% increase year-on-year in ordinary profit to 108 billion yen (approx. USD1.08 billion) for the year’s end on March 31, 2014, with the sales increasing by 14% year-on-year to around 2.23 trillion yen (approx. USD22.3 billion).”

The operating profit of 2 billion yen (USD20 million) can be generated by the company with a 1-yen depreciation against the US dollar.
Yen weakening more than expected, an improvement in performance of Petro Rabigh, a bet-the-company equity method affiliate, and the expansion of international sales of agricultural chemicals including chemical herbicides that are showing increased sales in foreign countries evolving around the partnership with Monsanto Company in the US have all contributed to the increase in revenue.

Sumitomo Chemical is a chemical giant that is positioned second in Japan after Mitsubishi Chemical by sales and has a well-balanced segment composition including petrochemicals, electronic component materials, agricultural chemicals and drugs.

The company is also making substantial investments in Singapore and Saudi Arabia. I have high expectations for this company because they have a courageous global management style.

Sumitomo Chemical

A Nikkei Newspaper article dated April 17th says, “Sumitomo Chemical Co., Ltd. is expected to report a 210% increase year-on-year in ordinary profit to 108 billion yen (approx. USD1.08 billion) for the year’s end on March 31, 2014, with the sales increasing by 14% year-on-year to around 2.23 trillion yen (approx. USD22.3 billion).”

The operating profit of 2 billion yen (USD20 million) can be generated by the company with a 1-yen depreciation against the US dollar.
Yen weakening more than expected, an improvement in performance of Petro Rabigh, a bet-the-company equity method affiliate, and the expansion of international sales of agricultural chemicals including chemical herbicides that are showing increased sales in foreign countries evolving around the partnership with Monsanto Company in the US have all contributed to the increase in revenue.

Sumitomo Chemical is a chemical giant that is positioned second in Japan after Mitsubishi Chemical by sales and has a well-balanced segment composition including petrochemicals, electronic component materials, agricultural chemicals and drugs.

The company is also making substantial investments in Singapore and Saudi Arabia. I have high expectations for this company because they have a courageous global management style.

Redox Flow Battery

An article on Nikkei Technology Online dated April 15th says that, “IEC started deliberations in early April for international standardization of redox flow battery with a longer operating life that can operate on a steady basis”.

The Redox flow battery is a rechargeable battery for electric power storage and its basic principle was developed by NASA in 1974. Although it is difficult to be downsized, it has a characteristic of being safer compared to the NaS battery.

A type of redox flow battery that is made using vanadium as one of the raw materials is under development for a practical application. Development initiative has been taken by several companies including Prudent Energy in China and Sumitomo Electric Industries in Japan.

IEC aims for completing the standard in the next few years. Needless to say, it is essential to develop an efficient and safe rechargeable battery in order to expand the use of regenerated energy and a low-carbon society come true.

Redox Flow Battery

An article on Nikkei Technology Online dated April 15th says that, “IEC started deliberations in early April for international standardization of redox flow battery with a longer operating life that can operate on a steady basis”.

The Redox flow battery is a rechargeable battery for electric power storage and its basic principle was developed by NASA in 1974. Although it is difficult to be downsized, it has a characteristic of being safer compared to the NaS battery.

A type of redox flow battery that is made using vanadium as one of the raw materials is under development for a practical application. Development initiative has been taken by several companies including Prudent Energy in China and Sumitomo Electric Industries in Japan.

IEC aims for completing the standard in the next few years. Needless to say, it is essential to develop an efficient and safe rechargeable battery in order to expand the use of regenerated energy and a low-carbon society come true.

Butadiene Price Rebound in Asia

A Nikkei Newspaper article dated April 18th says that, “Price of butadiene, a petrochemical product used to make synthetic rubber, is increasing in Asian countries, and the spot price was recently around $1,380 per ton — more than 15% higher than in late March.”

Butadiene is hardly produced from shale gas derived ingredients but produced solely from naphtha derived ingredients.
Therefore, the production amount of butadiene tends to decrease if the use of shale gas increases.

However, compared with past years, the butadiene price still remains low and whether the rebound price will stay or not depends on the regain of demands for major applications such as synthetic rubber and ABS resin.

Butadiene Price Rebound in Asia

A Nikkei Newspaper article dated April 18th says that, “Price of butadiene, a petrochemical product used to make synthetic rubber, is increasing in Asian countries, and the spot price was recently around $1,380 per ton — more than 15% higher than in late March.”

Butadiene is hardly produced from shale gas derived ingredients but produced solely from naphtha derived ingredients.
Therefore, the production amount of butadiene tends to decrease if the use of shale gas increases.

However, compared with past years, the butadiene price still remains low and whether the rebound price will stay or not depends on the regain of demands for major applications such as synthetic rubber and ABS resin.

Daishin Scholarship

As usual, early in the morning I made a 2-and-a-half-hour trip from Osaka to Tokyo by bullet train.

I had meetings until the evening with our business partners including domestic chemical manufacturers and a European customer.

Today, after finishing all of the meetings, I participated in the final round of interviews to select a winner of Daishin Scholarship.

With other members of the selection committee, I interviewed applicants who had passed the second stage of the selection to select the third Daishin Scholar.

A wonderful and brilliant thinking young lady who had a dream of changing the world in a better way was selected.

It was a valuable opportunity even for me to be able to talk to an innocent young person full of dreams and passion.

I hope she will have a wonderful experience during her study abroad.

Daishin Scholarship

As usual, early in the morning I made a 2-and-a-half-hour trip from Osaka to Tokyo by bullet train.

I had meetings until the evening with our business partners including domestic chemical manufacturers and a European customer.

Today, after finishing all of the meetings, I participated in the final round of interviews to select a winner of Daishin Scholarship.

With other members of the selection committee, I interviewed applicants who had passed the second stage of the selection to select the third Daishin Scholar.

A wonderful and brilliant thinking young lady who had a dream of changing the world in a better way was selected.

It was a valuable opportunity even for me to be able to talk to an innocent young person full of dreams and passion.

I hope she will have a wonderful experience during her study abroad.

Aged 65 or Older More Than 25% in Japan

According to the Nikkei Newspaper dated April 16th, “The number of people aged 65 or older now make up a quarter of the total population in Japan for the first time.”

With the population of the working generation shrinking rapidly, today’s elderly people are much younger and healthier compared to those who lived in old days. Nowadays many people who are in their 60’s are still contributing to the society by actively working and paying their taxes.

Eventually, even people in their 70’s might work energetically in the future.

Currently, still many women leave their job once they give birth to children. It is necessary to foster a better working environment for women who work while parenting.

Aged 65 or Older More Than 25% in Japan

According to the Nikkei Newspaper dated April 16th, “The number of people aged 65 or older now make up a quarter of the total population in Japan for the first time.”

With the population of the working generation shrinking rapidly, today’s elderly people are much younger and healthier compared to those who lived in old days. Nowadays many people who are in their 60’s are still contributing to the society by actively working and paying their taxes.

Eventually, even people in their 70’s might work energetically in the future.

Currently, still many women leave their job once they give birth to children. It is necessary to foster a better working environment for women who work while parenting.

Business Trip to Korea

Today I am in Korea on a business trip.  This is my first visit in a long while.

While I am heading for a hotel from Kimpo Airport in my friend’s car, I noticed that the sky looked white. It was not the normal cloudy sky. The sky looked the same as the one I saw in China the other day.

According to my friend, the condition is particularly getting worse these days as they rarely see blue sky. I think something should be done before it becomes too late.

Meanwhile, I heard that the economic condition was not great recently and that real estate prices were falling in Korea.

Business Trip to Korea

Today I am in Korea on a business trip.  This is my first visit in a long while.

While I am heading for a hotel from Kimpo Airport in my friend’s car, I noticed that the sky looked white. It was not the normal cloudy sky. The sky looked the same as the one I saw in China the other day.

According to my friend, the condition is particularly getting worse these days as they rarely see blue sky. I think something should be done before it becomes too late.

Meanwhile, I heard that the economic condition was not great recently and that real estate prices were falling in Korea.