Japan’s Ethylene and Steel Production Hit Decades-Long Lows Amidst Chinese Overproduction

Ethylene production in Japan has plunged to unprecedented levels not seen since 1987, totaling 4.98 million tonnes in 2024. This significant decline marks the first time in nearly four decades that production has fallen below 5 million tonnes. The Japan Petrochemical Industry Association, a key source of data on the petrochemical sector, released this information, highlighting the challenges facing the industry.

The drop in ethylene output underscores a broader trend of shrinking domestic demand within Japan. Ethylene, a foundational component in plastic manufacturing, has seen its market dynamics shift drastically due to external pressures. Overproduction in China has exerted downward pressure on ethylene prices, exacerbating the challenges for Japanese producers.

Simultaneously, Japan's steel production has also reached historically low levels, marking its lowest output in decades. While steelmakers have made strides in restructuring efforts, the chemical industry has lagged in implementing similar reforms. This disparity highlights the ongoing struggles within Japan's industrial sectors to adapt to evolving global market conditions.