The Japan Petrochemical Industry Association released data on Thursday indicating that Japan's production of ethylene, a crucial component for plastics, has plummeted to its lowest levels since 1987. In 2024, ethylene production totaled 4.98 million tonnes, marking the first instance it has fallen below the 5 million tonnes benchmark in nearly four decades. This downturn is largely attributed to a decline in domestic demand and the effects of overproduction in China, which have suppressed ethylene prices.
Japan's steel production has also experienced a significant decline, reaching multidecade lows. Unlike the chemical industry, however, Japanese steelmakers have made noteworthy progress in restructuring their operations, which has partially mitigated the impact of reduced output.
The data from the Japan Petrochemical Industry Association underscores the challenges confronting Japan's chemical sector. Shrinking domestic demand for ethylene is a key factor in the declining production rates. Meanwhile, China's overproduction continues to exert downward pressure on prices, complicating recovery efforts for Japanese producers.
In contrast, Japan's steel industry has been more proactive in restructuring efforts to adapt to changing market conditions. While both sectors face significant hurdles, the steel industry has shown more resilience against market shifts compared to its chemical counterpart.
Overall, the data highlights the ongoing challenges within Japan's industrial landscape. Both the chemical and steel sectors are grappling with external pressures and internal demand shifts. The ethylene production figures serve as a stark reminder of the difficulties that lie ahead for Japan’s chemical industry as it seeks to navigate these turbulent waters.
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