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.

The Furukawa Battery Developed Paper Air Battery

The Furukawa Battery Co., Ltd. announced on August 29th, “the company is launching an emergency magnesium air battery in a paper container in December this year”.

A magnesium air battery is a kind of fuel battery that uses metallic magnesium on the negative side, aerial oxygen on the positive side, and salt solution as an electrolytic solution.

The Furukawa Battery was established by spinning off the battery section of Furukawa Electric Co., Ltd. in 1950.
Its factory is located in Fukushima Prefecture, the area struck by the Great East Japan Earthquake.
Based on its experience during the earthquake, the company successfully developed the world’s first emergency magnesium air battery in a paper container.
The battery can generate electricity only by adding water or sea water (the maximum power generation time is 5 days) and it can charge a smartphone up to 30 times.

Human beings may sometimes be foolish but are gradually evolving.

The Furukawa Battery Developed Paper Air Battery

The Furukawa Battery Co., Ltd. announced on August 29th, “the company is launching an emergency magnesium air battery in a paper container in December this year”.

A magnesium air battery is a kind of fuel battery that uses metallic magnesium on the negative side, aerial oxygen on the positive side, and salt solution as an electrolytic solution.

The Furukawa Battery was established by spinning off the battery section of Furukawa Electric Co., Ltd. in 1950.
Its factory is located in Fukushima Prefecture, the area struck by the Great East Japan Earthquake.
Based on its experience during the earthquake, the company successfully developed the world’s first emergency magnesium air battery in a paper container.
The battery can generate electricity only by adding water or sea water (the maximum power generation time is 5 days) and it can charge a smartphone up to 30 times.

Human beings may sometimes be foolish but are gradually evolving.

Butadiene Price Decreased

According to the Nikkei Newspaper on August 28th, “the prices of butadiene decreased in East Asia, from USD1,650 per ton in early August to USD1,430.”

Butadiene is a petrochemical product made of naphtha and mainly used as a raw material for synthetic rubber.
One of the reasons for the price decrease may be the recent downfall in crude oil price, and another reason may be the continuous downward trend of natural rubber, which is a competing product of synthetic rubber, due to decreased demand.

Butadiene Price Decreased

According to the Nikkei Newspaper on August 28th, “the prices of butadiene decreased in East Asia, from USD1,650 per ton in early August to USD1,430.”

Butadiene is a petrochemical product made of naphtha and mainly used as a raw material for synthetic rubber.
One of the reasons for the price decrease may be the recent downfall in crude oil price, and another reason may be the continuous downward trend of natural rubber, which is a competing product of synthetic rubber, due to decreased demand.

Medicine for Influenza Attracting Attention in the Ebola Virus Epidemic

According to the Nikkei Newspaper on August 25, “Mr. Suga, Chief Cabinet Secretary of Japan, announced in a press conference in the morning on that date that the Government, if WHO requests, is ready to provide medication that might be effective in the fight against Ebola hemorrhagic fever”.

The medication he was referring to was Favipiravir (product name: Avigan Tablet), which Toyama Pure Chemical Industries, Ltd., a subsidiary of Fujifilm approved by the Ministry of Health, Labour and Welfare on March 24, 2014, developed as a medicine for influenza.
The Ebola virus has a viral structure similar to that of influenza. The medicine was proved to be effective on the Ebola virus in an animal experiment in Germany.

Fujifilm says it currently has an inventory for 20 thousand people and has already prepared a system to continuously produce it.
I really hope it works.

Medicine for Influenza Attracting Attention in the Ebola Virus Epidemic

According to the Nikkei Newspaper on August 25, “Mr. Suga, Chief Cabinet Secretary of Japan, announced in a press conference in the morning on that date that the Government, if WHO requests, is ready to provide medication that might be effective in the fight against Ebola hemorrhagic fever”.

The medication he was referring to was Favipiravir (product name: Avigan Tablet), which Toyama Pure Chemical Industries, Ltd., a subsidiary of Fujifilm approved by the Ministry of Health, Labour and Welfare on March 24, 2014, developed as a medicine for influenza.
The Ebola virus has a viral structure similar to that of influenza. The medicine was proved to be effective on the Ebola virus in an animal experiment in Germany.

Fujifilm says it currently has an inventory for 20 thousand people and has already prepared a system to continuously produce it.
I really hope it works.

Financial Results of Chemical Companies in Japan (2014.4-6)

Sales and operating profit of each company are as follows:

 Shin-Etsu ChemicalMitsubishi Chemical HD Asahi KaseiSumitomo ChemicalMitsui ChemicalsTosoh
Sales Q1 USD2.95BUSD8.11BUSD4.47BUSD5.57BUSD3.89BUSD1.78B
Profit Q1USD486MUSD295MUSD266MUSD191MUSD104MUSD51M

Sources: Website of each company

Remarks:
1) Calculated by using exchange rate of USD1.00 = JPY100
2) Profit is operating profit before interest and taxes.

Financial Results of Chemical Companies in Japan (2014.4-6)

Sales and operating profit of each company are as follows:

 Shin-Etsu ChemicalMitsubishi Chemical HD Asahi KaseiSumitomo ChemicalMitsui ChemicalsTosoh
Sales Q1 USD2.95BUSD8.11BUSD4.47BUSD5.57BUSD3.89BUSD1.78B
Profit Q1USD486MUSD295MUSD266MUSD191MUSD104MUSD51M

Sources: Website of each company

Remarks:
1) Calculated by using exchange rate of USD1.00 = JPY100
2) Profit is operating profit before interest and taxes.

Sake Export reached a Record High

According to the Nikkei Newspaper on August 22, sake exports reached a record high.

Sake, or rice wine, is a brewed beverage made from rice and malted rice.
More than 1000 sake breweries all over Japan are competing with their unique tastes. Sake is a traditional part of Japan’s culture, and is one that Japan is proud of.

From time to time I have the opportunity to drink sake outside Japan. Frankly, sometimes, it is not that tasty and disappointing. This may be because it is often low-grade sake made of distilled alcohol and sugar along with rice and malted rice.

The price of exported sake per liter is said to have increased by 10%, which I appreciate because I would like foreign people to enjoy really delicious sake.

Sake Export reached a Record High

According to the Nikkei Newspaper on August 22, sake exports reached a record high.

Sake, or rice wine, is a brewed beverage made from rice and malted rice.
More than 1000 sake breweries all over Japan are competing with their unique tastes. Sake is a traditional part of Japan’s culture, and is one that Japan is proud of.

From time to time I have the opportunity to drink sake outside Japan. Frankly, sometimes, it is not that tasty and disappointing. This may be because it is often low-grade sake made of distilled alcohol and sugar along with rice and malted rice.

The price of exported sake per liter is said to have increased by 10%, which I appreciate because I would like foreign people to enjoy really delicious sake.

Steel Price agreed to Reduce

According to the Nikkei Newspaper on August 21, Toyota Motor Corporation, Nippon Steel & Sumitomo Metal Corporation and other major steel companies agreed to reduce the steel sheet price by a little less than JPY3,000 (approx. USD30) per ton (a little less than 3%) for the April–September period in 2014.

The fall in the price of iron ore, the raw material for steel (USD170 per ton in 2011, down to less than USD100 now), and coal (USD130 per ton in 2008, down to less than USD80 now) are in the background to this decision.
The agreed price will be applied to products shipped in April and already delivered.

This is a common practice in Japan, but is it practiced in other countries as well?

Steel Price agreed to Reduce

According to the Nikkei Newspaper on August 21, Toyota Motor Corporation, Nippon Steel & Sumitomo Metal Corporation and other major steel companies agreed to reduce the steel sheet price by a little less than JPY3,000 (approx. USD30) per ton (a little less than 3%) for the April–September period in 2014.

The fall in the price of iron ore, the raw material for steel (USD170 per ton in 2011, down to less than USD100 now), and coal (USD130 per ton in 2008, down to less than USD80 now) are in the background to this decision.
The agreed price will be applied to products shipped in April and already delivered.

This is a common practice in Japan, but is it practiced in other countries as well?

Sales in July-September Period of Japanese Companies Downturn

According to Nikkei Newspaper on August 17th, “the result of a survey carried out among major companies in Japan showed 23% replied that their sales forecast for the July-September period would downturn from the original plan, and only 11% expected better performance”.
We, a trading company specialized in chemical products, saw a slight sales downturn around June, then the sales in July recorded a decline year-on-year as well as from the previous month; sales in August have not been good enough so far.

The economy in the summer has often been slower in recent years and this pattern seems to apply this year again.
53% of 140 major Japanese companies suffered a year-on-year sales decline in July, according to the survey.

Sales in July-September Period of Japanese Companies Downturn

According to Nikkei Newspaper on August 17th, “the result of a survey carried out among major companies in Japan showed 23% replied that their sales forecast for the July-September period would downturn from the original plan, and only 11% expected better performance”.
We, a trading company specialized in chemical products, saw a slight sales downturn around June, then the sales in July recorded a decline year-on-year as well as from the previous month; sales in August have not been good enough so far.

The economy in the summer has often been slower in recent years and this pattern seems to apply this year again.
53% of 140 major Japanese companies suffered a year-on-year sales decline in July, according to the survey.

Condition of Samsung’s Chairperson

Three months have passed since Mr. Lee Kun-Hee, the Chairperson of Samsung Electronics Co., Ltd., lost consciousness on May 10th due to acute myocardial infarction and was carried to a hospital.

A major South Korean newspaper, The Chosun Ilbo, reported on August 11th, “He was gradually recovering but is still far from speaking or communicating. Although he has been making more eye contact, it is not certain if he recognizes the person”.

We hope for a smooth recovery of the top leader of the biggest company in South Korea, which has a market capitalization of 20% of South Korean GDP. However, hearing the news about his condition, it is clear that a new management team will have to be established.

Condition of Samsung’s Chairperson

Three months have passed since Mr. Lee Kun-Hee, the Chairperson of Samsung Electronics Co., Ltd., lost consciousness on May 10th due to acute myocardial infarction and was carried to a hospital.

A major South Korean newspaper, The Chosun Ilbo, reported on August 11th, “He was gradually recovering but is still far from speaking or communicating. Although he has been making more eye contact, it is not certain if he recognizes the person”.

We hope for a smooth recovery of the top leader of the biggest company in South Korea, which has a market capitalization of 20% of South Korean GDP. However, hearing the news about his condition, it is clear that a new management team will have to be established.

Japan’s GDP Decreased by 6.8%

According to the announcement of the Cabinet Office, Government of Japan on August 13th, the growth rate of the real GDP recorded -1.7% (-6.8% per annum) in the April to June period.

The negative growth of this period due to the last-minute demands before the consumption tax increase as of April 1st has been incorporated. Transition of demand will be the center of attention. I see the overseas demand in general is still weak, while the domestic demand has not recovered its momentum yet.

Many private research firms predict that capital investments and personal spending are going to increase so that the growth rate of the GDP will recover quickly.
I hope it will.

Japan’s GDP Decreased by 6.8%

According to the announcement of the Cabinet Office, Government of Japan on August 13th, the growth rate of the real GDP recorded -1.7% (-6.8% per annum) in the April to June period.

The negative growth of this period due to the last-minute demands before the consumption tax increase as of April 1st has been incorporated. Transition of demand will be the center of attention. I see the overseas demand in general is still weak, while the domestic demand has not recovered its momentum yet.

Many private research firms predict that capital investments and personal spending are going to increase so that the growth rate of the GDP will recover quickly.
I hope it will.

Condominium Sales in Tokyo Down

According to the announcement of the Real Estate Economic Institute Co., Ltd. on August 12th, the number of condominiums sold in the Tokyo metropolitan area in July fell about 20% year-on-year to 4,222.
Though, until recently, the sales of condominiums seemed to have been strong, it might be reasonable to consider that the housing demand is going to fall in the mid- and long-term in Japan unless some measures are taken, where the birthrate goes on falling and the population is aging.
Interest rates in Japan have been at a historically low level as the Bank of Japan keeps purchasing government bonds so that a mortgage with an interest rate less than 1% is advertised, yet, how far will interest rates fall, real estate prices will not keep rising unless prospects for the structural decline in birthrate improve and a way to growth is paved.
The funding requirement diffusion index indicating the funding requirement for mortgage was -17 in July, the lowest since the survey started.

Condominium Sales in Tokyo Down

According to the announcement of the Real Estate Economic Institute Co., Ltd. on August 12th, the number of condominiums sold in the Tokyo metropolitan area in July fell about 20% year-on-year to 4,222.
Though, until recently, the sales of condominiums seemed to have been strong, it might be reasonable to consider that the housing demand is going to fall in the mid- and long-term in Japan unless some measures are taken, where the birthrate goes on falling and the population is aging.
Interest rates in Japan have been at a historically low level as the Bank of Japan keeps purchasing government bonds so that a mortgage with an interest rate less than 1% is advertised, yet, how far will interest rates fall, real estate prices will not keep rising unless prospects for the structural decline in birthrate improve and a way to growth is paved.
The funding requirement diffusion index indicating the funding requirement for mortgage was -17 in July, the lowest since the survey started.