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.

Prices of Benzene and Paraxylene Increased

According to the Nikkei Newspaper on June 27, East Asian spot prices of Benzene rose about 5% to USD1,410 – USD1,430 per ton in the past one week.
Some problems in an oil refinery in the U.S., to where manufacturers in Japan and South Korea export benzene, made the prices in the U.S. rise drastically, which impacted the Asian market.
The production of paraxylene has been decreasing, but the market now seems to be rallying sharply.
On May 28, we reported that its prices dropped to USD1,200 – USD1,250 per ton in this weblog. However, I have heard it has recently recovered to about USD1,400 per ton.

Prices of Benzene and Paraxylene Increased

According to the Nikkei Newspaper on June 27, East Asian spot prices of Benzene rose about 5% to USD1,410 – USD1,430 per ton in the past one week.
Some problems in an oil refinery in the U.S., to where manufacturers in Japan and South Korea export benzene, made the prices in the U.S. rise drastically, which impacted the Asian market.
The production of paraxylene has been decreasing, but the market now seems to be rallying sharply.
On May 28, we reported that its prices dropped to USD1,200 – USD1,250 per ton in this weblog. However, I have heard it has recently recovered to about USD1,400 per ton.

Mitsubishi Rayon to Manufacture MMA in Saudi Arabia and U.S.A.

On June 16, Mitsubishi Rayon announced it is constructing a new MMA (methyl methacrylate monomer) factory (annual production capacity about 250 thousand tons) in the U.S. jointly with Mitsui & Co., Ltd.

The factory is scheduled to start operation in 2018. On June 26, Mitsubishi Rayon further announced it is constructing an MMA factory (annual production capacity about 250 thousand tons of MMA and 40 thousand tons of PMMA) in Saudi Arabia jointly with SABIC and the operation is scheduled to start in mid-2017.

MMA is a raw material for acrylate resin that is highly transparent and impact-resistant and is used for construction materials, water tanks, lighting covers, lamps for automobiles or display windows for cell phones as a substitute for conventional glass.

Mitsubishi Rayon is the world’s No. 1 producer of MMA monomer. Since demand for this material is expected to continue expanding, the company is rapidly setting up strategic global supply bases with its advanced MMA production technology, using low cost raw materials such as ethylene derived from shale gas in the US and gas in Saudi Arabia.
Mitsubishi Chemical Holdings, its parent company, is steadily proceeding with its worldwide strategy.

Mitsubishi Rayon to Manufacture MMA in Saudi Arabia and U.S.A.

On June 16, Mitsubishi Rayon announced it is constructing a new MMA (methyl methacrylate monomer) factory (annual production capacity about 250 thousand tons) in the U.S. jointly with Mitsui & Co., Ltd.

The factory is scheduled to start operation in 2018. On June 26, Mitsubishi Rayon further announced it is constructing an MMA factory (annual production capacity about 250 thousand tons of MMA and 40 thousand tons of PMMA) in Saudi Arabia jointly with SABIC and the operation is scheduled to start in mid-2017.

MMA is a raw material for acrylate resin that is highly transparent and impact-resistant and is used for construction materials, water tanks, lighting covers, lamps for automobiles or display windows for cell phones as a substitute for conventional glass.

Mitsubishi Rayon is the world’s No. 1 producer of MMA monomer. Since demand for this material is expected to continue expanding, the company is rapidly setting up strategic global supply bases with its advanced MMA production technology, using low cost raw materials such as ethylene derived from shale gas in the US and gas in Saudi Arabia.
Mitsubishi Chemical Holdings, its parent company, is steadily proceeding with its worldwide strategy.

Toyota Plans to Release Fuel-cell-powered Car within This Fiscal Year

According to an announcement made by Toyota Motor Corporation on June 25, “the company will launch a sedan-type fuel-cell-powered car in Japan by March 2015. The price will be around JPY 7 million. The car will be launched in summer 2015 in Europe”.
Using hydrogen as fuel, a fuel-cell-powered car has a system to drive a motor by generating electric power through reaction with oxygen in the air.

I once rented an electric vehicle (EV) in Okinawa. The maximum driving distance of an EV is around 200 kilometers, which is rather short, and the number of charging stations is limited. Therefore, I had to think about charging the vehicle all the time. I remember that it took around 20 minutes to fully charge the battery.
On the other hand, the maximum driving distance of a fuel-cell-powered car is longer, around 700 kilometers, and the hydrogen charging time is only 3 minutes. I am impressed with the high-level convenience of the car. In the future, I expect the establishment of more hydrogen stations will be promoted. However, further innovations for safety is inevitable.

Toyota Plans to Release Fuel-cell-powered Car within This Fiscal Year

According to an announcement made by Toyota Motor Corporation on June 25, “the company will launch a sedan-type fuel-cell-powered car in Japan by March 2015. The price will be around JPY 7 million. The car will be launched in summer 2015 in Europe”.
Using hydrogen as fuel, a fuel-cell-powered car has a system to drive a motor by generating electric power through reaction with oxygen in the air.

I once rented an electric vehicle (EV) in Okinawa. The maximum driving distance of an EV is around 200 kilometers, which is rather short, and the number of charging stations is limited. Therefore, I had to think about charging the vehicle all the time. I remember that it took around 20 minutes to fully charge the battery.
On the other hand, the maximum driving distance of a fuel-cell-powered car is longer, around 700 kilometers, and the hydrogen charging time is only 3 minutes. I am impressed with the high-level convenience of the car. In the future, I expect the establishment of more hydrogen stations will be promoted. However, further innovations for safety is inevitable.

Increase in International Prices of Petroleum Products

According to a Nikkei Newspaper article dated June 24th, the “Spot price of naphtha is now around USD990/ton”.
Naphtha is a fraction obtained from crude oil through separation by distillation with a boiling point of 30-180 degree C. In Japan, it is used as a main ingredient for petroleum products such as ethylene.

With crude oil fetching high prices as a result of the growing tension in Iraq, the second largest crude oil producer among OPEC countries, the price of naphtha has also increased by about 6% since the beginning of June.
An increase in naphtha’s price has resulted in the increase in prices of products including polyethylene and benzene.

However, since April, the number of inquiries our company has received from Asian countries overall is on a downward trend and the Asian market including China is currently lacking enthusiasm. Therefore, it may be difficult to expect that the demand will boost up the price.
It is still uncertain whether the price increase will spread to the downstream chemical products in general. If the increase in naphtha price escalates, the profit of chemical manufacturers may be squeezed.

Increase in International Prices of Petroleum Products

According to a Nikkei Newspaper article dated June 24th, the “Spot price of naphtha is now around USD990/ton”.
Naphtha is a fraction obtained from crude oil through separation by distillation with a boiling point of 30-180 degree C. In Japan, it is used as a main ingredient for petroleum products such as ethylene.

With crude oil fetching high prices as a result of the growing tension in Iraq, the second largest crude oil producer among OPEC countries, the price of naphtha has also increased by about 6% since the beginning of June.
An increase in naphtha’s price has resulted in the increase in prices of products including polyethylene and benzene.

However, since April, the number of inquiries our company has received from Asian countries overall is on a downward trend and the Asian market including China is currently lacking enthusiasm. Therefore, it may be difficult to expect that the demand will boost up the price.
It is still uncertain whether the price increase will spread to the downstream chemical products in general. If the increase in naphtha price escalates, the profit of chemical manufacturers may be squeezed.

Strong Demand for ABS Resin

Japan ABS Resin Industry Association announced that the ABS shipping volume in May rose 5% year-over-year to 28,652 tons. While the domestic shipment was strong with a 10% increase, exports fell 3% from the previous year.
ABS Resin is a plastic made from A (Acrylonitrile), B (Butadiene) and S (Styrene): ABS stands for their initials. It has excellent shock resistance, formability and hardness and is used to manufacture home appliances and car components.
Although domestic shipments increased for 9 consecutive months, exports dropped below 10,000 tons for the first time in the 4 months since January; its future development is a concern.

Strong Demand for ABS Resin

Japan ABS Resin Industry Association announced that the ABS shipping volume in May rose 5% year-over-year to 28,652 tons. While the domestic shipment was strong with a 10% increase, exports fell 3% from the previous year.
ABS Resin is a plastic made from A (Acrylonitrile), B (Butadiene) and S (Styrene): ABS stands for their initials. It has excellent shock resistance, formability and hardness and is used to manufacture home appliances and car components.
Although domestic shipments increased for 9 consecutive months, exports dropped below 10,000 tons for the first time in the 4 months since January; its future development is a concern.

Exports in May declined in Japan

According to the June 18 announcement of the Ministry of Finance of Japan, Japan’s exports in May fell 2.7% year over year to 5,607.6 billion Japanese Yen, recording a decrease year over year for the first time in 15 months.
Looking at each region, exports to China slightly increased by 0.4% to 1,049.7 billion Japanese Yen, but exports to the U.S. and to Asian countries fell from the previous year, 2.8% to 1,010.7 billion Japanese Yen and 3.4% to 3,087.9 billion Japanese Yen, respectively.
Exchange rates have been hovering with a weak Japanese Yen trending lower than USD1 = JPY100 – it seems the slowdown of the Asian economy has impacted this.
I asked some fellow manufacturers and trading companies in the chemical field in Japan about recent economic trends. The volume of orders in April to June has been poor in most companies.

Exports in May declined in Japan

According to the June 18 announcement of the Ministry of Finance of Japan, Japan’s exports in May fell 2.7% year over year to 5,607.6 billion Japanese Yen, recording a decrease year over year for the first time in 15 months.
Looking at each region, exports to China slightly increased by 0.4% to 1,049.7 billion Japanese Yen, but exports to the U.S. and to Asian countries fell from the previous year, 2.8% to 1,010.7 billion Japanese Yen and 3.4% to 3,087.9 billion Japanese Yen, respectively.
Exchange rates have been hovering with a weak Japanese Yen trending lower than USD1 = JPY100 – it seems the slowdown of the Asian economy has impacted this.
I asked some fellow manufacturers and trading companies in the chemical field in Japan about recent economic trends. The volume of orders in April to June has been poor in most companies.

Indium Prices Down

According to Japan Metal Bulletin on June 10, domestic prices of low-grade indium for alloy and others fell by JPY1,000/kg from the previous week to JPY73,000 – 77,000.

Indium is a rare metal produced as a by-product of Zinc. China is the biggest producing country. Since speculation in China has pushed prices up recently, there is concern about a sudden price drop. Fanya Metal Exchange, the biggest rare metal exchange in China, is speculated to have an inventory exceeding 2,500 tons; this is well over the 600 tons that is the annual virgin indium demand throughout the world, excluding recycled products.

According to Metal Bulletin (UK), the Chinese domestic market has been consistent at around RMB5,000/kg since April, up about 25% from RMB4,000/kg a year ago.
Japan is one of the dominant markets; but domestic demand in Japan at present seems stable. In the long term, domestic usage is gradually decreasing.

Indium Prices Down

According to Japan Metal Bulletin on June 10, domestic prices of low-grade indium for alloy and others fell by JPY1,000/kg from the previous week to JPY73,000 – 77,000.

Indium is a rare metal produced as a by-product of Zinc. China is the biggest producing country. Since speculation in China has pushed prices up recently, there is concern about a sudden price drop. Fanya Metal Exchange, the biggest rare metal exchange in China, is speculated to have an inventory exceeding 2,500 tons; this is well over the 600 tons that is the annual virgin indium demand throughout the world, excluding recycled products.

According to Metal Bulletin (UK), the Chinese domestic market has been consistent at around RMB5,000/kg since April, up about 25% from RMB4,000/kg a year ago.
Japan is one of the dominant markets; but domestic demand in Japan at present seems stable. In the long term, domestic usage is gradually decreasing.

Monoethylene Glycol (MEG) Market Rebound

According to The Chemical Daily on June 9, the Asian market of Monoethylene Glycol has bounced back from less than USD900 per ton to close to USD1,000.
MEG is a colorless, odorless liquid, mainly used as raw material of PET resin. As it dissolves in water, has relatively low toxicity and a low melting point, it is used for an anti-freezing solution in cars as well.
A speculation of a downturn in supply from major manufacturers is emerging, so the prices have been sharply recovering since late May.

Monoethylene Glycol (MEG) Market Rebound

According to The Chemical Daily on June 9, the Asian market of Monoethylene Glycol has bounced back from less than USD900 per ton to close to USD1,000.
MEG is a colorless, odorless liquid, mainly used as raw material of PET resin. As it dissolves in water, has relatively low toxicity and a low melting point, it is used for an anti-freezing solution in cars as well.
A speculation of a downturn in supply from major manufacturers is emerging, so the prices have been sharply recovering since late May.

Shrinking Japanese Population

According to an announcement dated June 4th by the Ministry of Health, Labor and Welfare, the number of births in Japan in 2013 was 1,029,800, which is down by 7431 from 2012 and the number of deaths in Japan in 2013 was 1,268,432, which is up by 12,073 from 2012.
Subtraction shows that the population of Japan decreased by 238,632.

Although the total fertility rate was 1.43%, which exceeded the value of the previous year of 1.41%, it is obvious that unless the rate becomes over 2, the population will continue to shrink.
Especially, the total fertility rate in Tokyo was 1.13%, which was well below the national average.

The leading cause of deaths was cancer (28.8%), followed by cardiac disorders (15.5%). Suicide ranked 7th with 2.1%. The number of male suicide victims was 18,146 and the number of female suicide victims was 7,892. There is a difference.
The number of people who passed away from old age was 16,807 for men and 52, 877 for women.

Shrinking Japanese Population

According to an announcement dated June 4th by the Ministry of Health, Labor and Welfare, the number of births in Japan in 2013 was 1,029,800, which is down by 7431 from 2012 and the number of deaths in Japan in 2013 was 1,268,432, which is up by 12,073 from 2012.
Subtraction shows that the population of Japan decreased by 238,632.

Although the total fertility rate was 1.43%, which exceeded the value of the previous year of 1.41%, it is obvious that unless the rate becomes over 2, the population will continue to shrink.
Especially, the total fertility rate in Tokyo was 1.13%, which was well below the national average.

The leading cause of deaths was cancer (28.8%), followed by cardiac disorders (15.5%). Suicide ranked 7th with 2.1%. The number of male suicide victims was 18,146 and the number of female suicide victims was 7,892. There is a difference.
The number of people who passed away from old age was 16,807 for men and 52, 877 for women.

PVC Resin Price in Asia

An article in the Chemical Daily dated June 5 says that PVC resin market in Asia is on a rebound and the price for June’s shipment was up USD20-30 per ton over the previous month”.
PVC resin is a typical plastic used for various applications including sundry goods, construction materials, and pipes. It is mainly produced from naphtha-derived ethylene salt-derived and chlorine salt. Over 35 million tons of PVC resin is manufactured worldwide and out of the volume, over 1,000 tons is produced in China.

Compared to the situation about 20 years ago when I started my career in this industry, the amount of production in China is increasing at a furious speed.
Around 150 to 200 tons of the material is produced in Japan, which is about the same amount as produced in Korea and Taiwan. These countries are in the export position as the amount of production exceeds their domestic consumption.
China, India, Australia, etc. are in the export position.
It seems that an equipment failure experienced by a Taiwan manufacturer in May pushed up the price, as people expected a decline in supply. Whether or not the price increase continues in the future depends on whether or not the demand will show an upward trend.

The PVC resin market in Japan was JPY192 per kilo, up JPY15 (approximately 8%) compared to the price at the end of last year supported by a strong increase in the number of public works. (Nikkei Newspaper dated on June 2)

PVC Resin Price in Asia

An article in the Chemical Daily dated June 5 says that PVC resin market in Asia is on a rebound and the price for June’s shipment was up USD20-30 per ton over the previous month”.
PVC resin is a typical plastic used for various applications including sundry goods, construction materials, and pipes. It is mainly produced from naphtha-derived ethylene salt-derived and chlorine salt. Over 35 million tons of PVC resin is manufactured worldwide and out of the volume, over 1,000 tons is produced in China.

Compared to the situation about 20 years ago when I started my career in this industry, the amount of production in China is increasing at a furious speed.
Around 150 to 200 tons of the material is produced in Japan, which is about the same amount as produced in Korea and Taiwan. These countries are in the export position as the amount of production exceeds their domestic consumption.
China, India, Australia, etc. are in the export position.
It seems that an equipment failure experienced by a Taiwan manufacturer in May pushed up the price, as people expected a decline in supply. Whether or not the price increase continues in the future depends on whether or not the demand will show an upward trend.

The PVC resin market in Japan was JPY192 per kilo, up JPY15 (approximately 8%) compared to the price at the end of last year supported by a strong increase in the number of public works. (Nikkei Newspaper dated on June 2)