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.

Car Sales in Japan Marking 4-month Consecutive Drop

According to the website of the Japan Automobile Dealers Association, the number of new car sales (the number of newly registered automobiles) in October was about 400,000 units, nearly a 6% drop year-on-year, marking a 4-month consecutive drop since July.
Last minute demand prior to the consumption tax increase in April this year is still having an impact.
I expect the year-on-year decreases will continue for some time in the future.

In order to sell many more cars in Japan’s rapidly aging society, it will be necessary to propose a car with a totally different concept, instead of gradually improving an existing model.
Such a new car might become popular in countries with similar issues including European countries.
Japanese car manufacturers, work a miracle again.

Car Sales in Japan Marking 4-month Consecutive Drop

According to the website of the Japan Automobile Dealers Association, the number of new car sales (the number of newly registered automobiles) in October was about 400,000 units, nearly a 6% drop year-on-year, marking a 4-month consecutive drop since July.
Last minute demand prior to the consumption tax increase in April this year is still having an impact.
I expect the year-on-year decreases will continue for some time in the future.

In order to sell many more cars in Japan’s rapidly aging society, it will be necessary to propose a car with a totally different concept, instead of gradually improving an existing model.
Such a new car might become popular in countries with similar issues including European countries.
Japanese car manufacturers, work a miracle again.

Maglev Train Construction to Start in December

On November 27, JR Tokai announced they are going to start construction for the maglev train on December 17.

Scheduled to begin operations in 2027, the maglev train will connect Tokyo and Nagoya (285km) in approximately 40 minutes at the fastest using new technology that utilizes superconducting magnetic levitation.
By 2045, the company hopes to extend the line to Osaka, connecting Tokyo and Osaka in 67 minutes.

I currently live in Osaka, and spend around 2 and a half hours going to Tokyo on business trips.
I would appreciate it if I could get to Tokyo in a little more than 1 hour.
However, the operation will start 31 years from now. I hope to have retired by then.

Maglev Train Construction to Start in December

On November 27, JR Tokai announced they are going to start construction for the maglev train on December 17.

Scheduled to begin operations in 2027, the maglev train will connect Tokyo and Nagoya (285km) in approximately 40 minutes at the fastest using new technology that utilizes superconducting magnetic levitation.
By 2045, the company hopes to extend the line to Osaka, connecting Tokyo and Osaka in 67 minutes.

I currently live in Osaka, and spend around 2 and a half hours going to Tokyo on business trips.
I would appreciate it if I could get to Tokyo in a little more than 1 hour.
However, the operation will start 31 years from now. I hope to have retired by then.

Yen’s Depreciation Leading Japan’s Export Recovery Trend

According to the October trade statistics bulletins announced by the Ministry of Finance on 20 November, Japan’s trade balance deficit was 710 billion Japanese yen (approx. USD seven billion one hundred million).
This is 250 billion Japanese yen (approx. USD two billion five hundred million) less than the previous month and 390 billion Japanese yen (approx. USD three billion nine hundred million) less year-on-year, respectively.

The export of automobiles, electronic devices, chemical products and steel increased by about 10%, while imports increased by only 2.7% year-on-year, affected by the crude oil price depreciation, etc.

Recently, in a conversation with a representative of a shipping line company, I heard that all tonnage for ships leaving from Japan to Singapore was already booked until December.
At last, the effect of the yen’s depreciation is starting to show.

Yen’s Depreciation Leading Japan’s Export Recovery Trend

According to the October trade statistics bulletins announced by the Ministry of Finance on 20 November, Japan’s trade balance deficit was 710 billion Japanese yen (approx. USD seven billion one hundred million).
This is 250 billion Japanese yen (approx. USD two billion five hundred million) less than the previous month and 390 billion Japanese yen (approx. USD three billion nine hundred million) less year-on-year, respectively.

The export of automobiles, electronic devices, chemical products and steel increased by about 10%, while imports increased by only 2.7% year-on-year, affected by the crude oil price depreciation, etc.

Recently, in a conversation with a representative of a shipping line company, I heard that all tonnage for ships leaving from Japan to Singapore was already booked until December.
At last, the effect of the yen’s depreciation is starting to show.

Prices of Petrochemical Products Falling Further in Asia

As has been repeatedly reported in this weblog, the price of every petrochemical product has been weakening since around this summer.
According to a Nikkei Newspaper article dated November 20, “the price of ethylene is USD1,200-1,240 per ton, down 20% since the summer, and the price of benzene is USD930-970 per ton, down 30% since June, when it marked its highest price”.

Although circumstances are specific to each product, all in all, the decreasing prices are due to the drop in demand for end products including resin, rubber, and paint.
This is all because there is a decline in house prices in China due to the downturn in the economy, leading to a drop in imports of raw materials for resin and the like.

Manufacturers of petrochemical products that implemented capital investments on the assumption demand would expand will be in a difficult phase for a while.

Prices of Petrochemical Products Falling Further in Asia

As has been repeatedly reported in this weblog, the price of every petrochemical product has been weakening since around this summer.
According to a Nikkei Newspaper article dated November 20, “the price of ethylene is USD1,200-1,240 per ton, down 20% since the summer, and the price of benzene is USD930-970 per ton, down 30% since June, when it marked its highest price”.

Although circumstances are specific to each product, all in all, the decreasing prices are due to the drop in demand for end products including resin, rubber, and paint.
This is all because there is a decline in house prices in China due to the downturn in the economy, leading to a drop in imports of raw materials for resin and the like.

Manufacturers of petrochemical products that implemented capital investments on the assumption demand would expand will be in a difficult phase for a while.

Prime Minister Abe Dissolved the House of Representatives and Called a General Election

A new election!

It seems difficult to bring down the Liberal Democratic Party led by Prime Minister Abe on the issue of postponing the second consumption tax increase.

However, as was repeatedly mentioned in this weblog, the profligate binge of public spending will eventually lead to inflation.

An inflation rate of 2 percent per year, the aim of Prime Minister Abe is, indeed, ideal, but my concern is the risk of hyperinflation.

 

 

Prime Minister Abe Dissolved the House of Representatives and Called a General Election

A new election!

It seems difficult to bring down the Liberal Democratic Party led by Prime Minister Abe on the issue of postponing the second consumption tax increase.

However, as was repeatedly mentioned in this weblog, the profligate binge of public spending will eventually lead to inflation.

An inflation rate of 2 percent per year, the aim of Prime Minister Abe is, indeed, ideal, but my concern is the risk of hyperinflation.

 

 

Further Consumption Tax Increase to 10% May Be Postponed

The Nikkei Newspaper published an article today under the banner headline “Consumption Tax Increase to 10% May Be Postponed”.
The consumption tax rate was increased from 5% to 8% in April 2014, and the rate was scheduled to be further increased to 10% in October 2015.
However, according to the article, Prime Minister Abe reportedly stated that he was “basically moving toward putting off” raising the tax from 8% to 10% and would decide as soon as the start of next week.

This disappointed me.
It is obvious that in order to repay the Japanese government debt that has grown to a massive amount, the government must increase the consumption tax rate as well as reconsider its profligate binge of public spending.
How can a family last for a long time if a husband earns only 50,000 dollars a year while his wife spends 100,000 dollars. We need more income and less waste!

Further Consumption Tax Increase to 10% May Be Postponed

The Nikkei Newspaper published an article today under the banner headline “Consumption Tax Increase to 10% May Be Postponed”.
The consumption tax rate was increased from 5% to 8% in April 2014, and the rate was scheduled to be further increased to 10% in October 2015.
However, according to the article, Prime Minister Abe reportedly stated that he was “basically moving toward putting off” raising the tax from 8% to 10% and would decide as soon as the start of next week.

This disappointed me.
It is obvious that in order to repay the Japanese government debt that has grown to a massive amount, the government must increase the consumption tax rate as well as reconsider its profligate binge of public spending.
How can a family last for a long time if a husband earns only 50,000 dollars a year while his wife spends 100,000 dollars. We need more income and less waste!

Kuroda Bazooka and Japanese Economy

It’s been two weeks since the Bank of Japan offered its surprise QQE2 ‘bazooka’ prompted by the bank’s governor, Kuroda.
During this period, the dollar-yen exchange rate saw the Japanese yen depreciate against the dollar by 6 Japanese yen, and the Nikkei stock average has been up by over 1,500 Japanese yen.
In addition, the U.S. Dow average has been up by over 400 USD.

So far, the situation calls for a celebration.
Behind this background lies the sluggish domestic economy that has failed to improve following the consumption tax rise implemented in April, and this ‘bazooka’ may have an element of functioning as ‘cover fire’ for Abenomics.

Although it may seem to have some effect at the moment, I don’t feel like fully supporting this political measure as I’m unsure about where it is heading.
Governor Kuroda must be feeling the same way.

The lady owner of a bar in Kitashinchi where I went yesterday for the first time in a long while told me she saw an increase in the number of customers in November compared to October.

Kuroda Bazooka and Japanese Economy

It’s been two weeks since the Bank of Japan offered its surprise QQE2 ‘bazooka’ prompted by the bank’s governor, Kuroda.
During this period, the dollar-yen exchange rate saw the Japanese yen depreciate against the dollar by 6 Japanese yen, and the Nikkei stock average has been up by over 1,500 Japanese yen.
In addition, the U.S. Dow average has been up by over 400 USD.

So far, the situation calls for a celebration.
Behind this background lies the sluggish domestic economy that has failed to improve following the consumption tax rise implemented in April, and this ‘bazooka’ may have an element of functioning as ‘cover fire’ for Abenomics.

Although it may seem to have some effect at the moment, I don’t feel like fully supporting this political measure as I’m unsure about where it is heading.
Governor Kuroda must be feeling the same way.

The lady owner of a bar in Kitashinchi where I went yesterday for the first time in a long while told me she saw an increase in the number of customers in November compared to October.

New Japan Chemical Co., Ltd. Stops Production of Cyclohexylamine

On November 5th, New Japan Chemical announced on its website it had stopped the production and sale of cyclohexylamine and dicyclohexylamine.

Cyclohexylamine is a benzene derivative used mainly for rubber chemicals; however, as domestic demand decreased rapidly after the Great East Japan Earthquake, New Japan Chemical’s board of directors decided it was difficult to improve profitability while competing against imported products.
As this company is the sole producer in Japan, in the future, Japanese users will be forced to buy imported products (from Germany, Taiwan, etc.).

New Japan Chemical Co., Ltd. Stops Production of Cyclohexylamine

On November 5th, New Japan Chemical announced on its website it had stopped the production and sale of cyclohexylamine and dicyclohexylamine.

Cyclohexylamine is a benzene derivative used mainly for rubber chemicals; however, as domestic demand decreased rapidly after the Great East Japan Earthquake, New Japan Chemical’s board of directors decided it was difficult to improve profitability while competing against imported products.
As this company is the sole producer in Japan, in the future, Japanese users will be forced to buy imported products (from Germany, Taiwan, etc.).

Benzene price decreases widely

According to an announcement by JX Nippon Oil & Energy Corporation dated November 4, the contract price of benzene for November for Asia has been determined as USD1,095/t, down by USD105 from the month before.

Benzene is a basic petrochemical used as a raw material for resin and adhesive and is one of the aromatic compounds produced from cracked gasoline derived from naphtha.
JX is a price leader of this product in Asia.
Since shale gas hardly produces any benzene, the production of benzene is on the decline in the U.S.

JX commented as follows: “the balance is well maintained because of an increase in exports to the U.S. due to production curtailment by paraxylene manufacturers”.
However, looking at the condition of the Asian market, demand in benzene has no momentum, and recently, the price in the U.S. is also said to be decreasing.
The contract price of JX has dropped below UDS1,100 for the first time in 2 years and 4 months, since July 2012.

Benzene price decreases widely

According to an announcement by JX Nippon Oil & Energy Corporation dated November 4, the contract price of benzene for November for Asia has been determined as USD1,095/t, down by USD105 from the month before.

Benzene is a basic petrochemical used as a raw material for resin and adhesive and is one of the aromatic compounds produced from cracked gasoline derived from naphtha.
JX is a price leader of this product in Asia.
Since shale gas hardly produces any benzene, the production of benzene is on the decline in the U.S.

JX commented as follows: “the balance is well maintained because of an increase in exports to the U.S. due to production curtailment by paraxylene manufacturers”.
However, looking at the condition of the Asian market, demand in benzene has no momentum, and recently, the price in the U.S. is also said to be decreasing.
The contract price of JX has dropped below UDS1,100 for the first time in 2 years and 4 months, since July 2012.

Drop in Tellurium Prices

According to a Metal Bulletin (MB) report dated October 29, tellurium prices have dropped by USD10/kg from USD125-145/kg last week to USD115-135/kg.
In the Chinese free market, the tellurium price has also dropped by approximately 10%.

Tellurium is a rare metal that is used as a raw material for thin-film solar cells in the form of cadmium telluride.
It is also used for Peltier devices, optical lens and semiconductors, etc.
Cadmium telluride-type solar cells are often used in Europe and the United States because of their cost competitiveness.
However, they are not commonly used in Japan as they contain cadmium, a harmful substance.
MB announces the official tellurium price every Wednesday and Friday, and the price of tellurium dropped for the first time in 10 months since last December.

According to an industrial rumor, 5N Plus, the biggest tellurium consumer, has refrained from purchasing tellurium from at least 2 months ago.
5N Plus is one of the largest global manufacturers of high-purity minor metals and supplies cadmium telluride (CdTe) to First Solar, a leading manufacturer of cadmium telluride (CdTe)-type solar cell modules.
5N Plus renewed its contract with First Solar in May this year for the exclusive supply and recycling of CdTe until 2019 and, at that time, this news also contributed to the increase in the price of tellurium.

Drop in Tellurium Prices

According to a Metal Bulletin (MB) report dated October 29, tellurium prices have dropped by USD10/kg from USD125-145/kg last week to USD115-135/kg.
In the Chinese free market, the tellurium price has also dropped by approximately 10%.

Tellurium is a rare metal that is used as a raw material for thin-film solar cells in the form of cadmium telluride.
It is also used for Peltier devices, optical lens and semiconductors, etc.
Cadmium telluride-type solar cells are often used in Europe and the United States because of their cost competitiveness.
However, they are not commonly used in Japan as they contain cadmium, a harmful substance.
MB announces the official tellurium price every Wednesday and Friday, and the price of tellurium dropped for the first time in 10 months since last December.

According to an industrial rumor, 5N Plus, the biggest tellurium consumer, has refrained from purchasing tellurium from at least 2 months ago.
5N Plus is one of the largest global manufacturers of high-purity minor metals and supplies cadmium telluride (CdTe) to First Solar, a leading manufacturer of cadmium telluride (CdTe)-type solar cell modules.
5N Plus renewed its contract with First Solar in May this year for the exclusive supply and recycling of CdTe until 2019 and, at that time, this news also contributed to the increase in the price of tellurium.